News releases

Sun Life Financial Reports Fourth Quarter and Full Year 2015 Results

The information contained in this document concerning the fourth quarter
of 2015 is based on the audited annual and unaudited interim financial
results of Sun Life Financial Inc. ("SLF Inc.") for the period ended
December 31, 2015. SLF Inc. and its subsidiaries are collectively
referred to as "the Company", "Sun Life Financial", "we", "our", and
"us", and also includes, where applicable, our joint ventures and
associates. Unless otherwise noted, all amounts are in Canadian
dollars.

Fourth Quarter 2015 Financial Highlights

Operating net income(1) of $598 million or $0.98 per share(1), compared to $511 million or $0.83 per share in the fourth quarter of
2014. Reported net income of $536 million or $0.87 per share, compared
to $502 million or $0.81 per share in the same period last year

Underlying net income(1) of $646 million or $1.05 per share(1) in the fourth quarter of 2015, compared to $360 million or $0.59 per
share in the fourth quarter of 2014

Operating return on equity(1) ("ROE") of 12.7% and underlying ROE(1) of 13.8% in the fourth quarter of 2015, compared to operating ROE and
underlying ROE of 12.6% and 8.8% in the same period last year,
respectively

Quarterly dividend declared of $0.39 per share

Minimum Continuing Capital and Surplus Requirements ratio for Sun Life
Assurance Company of Canada of 240%

Global assets under management ("AUM") of $891 billion

2015 Annual Financial Highlights

Operating net income of $2,253 million or $3.68 per share, compared to
$1,920 million or $3.13 per share in 2014. Reported net income of
$2,185 million or $3.55 per share, compared to $1,762 million or $2.86
per share in 2014

Underlying net income of $2,305 million or $3.76 per share in 2015,
compared to $1,816 million or $2.96 per share in 2014

Operating ROE of 12.6% and underlying ROE of 12.8% in 2015, compared to
operating ROE and underlying ROE of 12.2% and 11.6% in 2014,
respectively

Dividends declared in the year of $1.51 per share

"Our strong fourth quarter capped off a successful year of growth and
momentum for Sun Life," said Dean Connor, President and Chief Executive
Officer, Sun Life Financial. "In 2015, we achieved underlying net
income of $2.3 billion, surpassing our 2015 financial objective of
$1.85 billion and ended the year with assets under management of $891
billion. We increased our quarterly common share dividend by 8% while
maintaining a strong capital position. We also announced six
transactions, committing $2.4 billion in capital in building our asset
management businesses, adding capabilities and scale in our U.S.
operations and strengthening our presence in Asia."

"The benefits of Sun Life's four pillar strategy, diversified business
mix, and de-risking actions were evident in 2015. The drop in commodity
prices, the TSX decline and lower interest rates created headwinds for
SLF Canada. However, the resulting devaluation of the Canadian dollar
increased income generated from our business outside of Canada, which
also benefited from relatively stronger economic growth," said Dean
Connor.

"In 2015, our clients received approximately $14 billion in claims and
benefits payments. Our clients need us now more than ever, and we will
continue to find new and innovative ways to provide them with the right
products and solutions to achieve lifetime financial security."

__________

(1)

Operating net income (loss), operating earnings (loss) per share,
operating ROE, underlying net income (loss), underlying earnings (loss)
per share, and underlying ROE are not based on International Financial
Reporting Standards. All earnings per share ("EPS") measures refer to
fully diluted EPS, unless otherwise stated. See Use of Non-IFRS
Financial Measures and Reconciliation of Non-IFRS Financial Measures.

"Our Canadian operations executed well. We grew our Wealth business with
the successful launch of our new segregated fund, Sun Life Guaranteed
Investment Funds, and grew SLGI mutual fund sales by 28%," Connor said.
"We ended the year with over 4,100 people in our Career Sales Force.
Both Group Benefits and Group Retirement Services extended their #1
positions in the Canadian market through continuing innovation, strong
client services and strong sales."

"In the U.S., we made excellent progress this year in improving the
profitability of our group life and disability business, and we
continue to be a leader in medical stop-loss insurance where we
reported a 12% increase in business in-force year over year," said
Connor. "Our acquisition of Assurant, Inc.'s U.S. Employee Benefits
business is expected to close by the end of the first quarter of 2016,
and this will add both scale and new capabilities to drive growth in
our U.S. pillar."

"MFS maintained its focus on client service and continued its strong
investment performance," said Connor. "MFS ended the year with assets
under management of US$413 billion and maintained margins of 40% for
the year. We expanded our asset management pillar by acquiring Bentall
Kennedy, Prime Advisors and Ryan Labs in 2015, which together with Sun
Life Investment Management Inc., generated net sales of $1.5 billion in
the year."

"SLF Asia had a strong year, finishing with underlying net income of
$252 million and increased insurance and wealth sales for 2015," said
Connor. "We also announced agreements to increase our joint venture
ownership in PVI Sun Life in Vietnam and Birla Sun Life Insurance in
India, in line with our Asia strategy."

Reported net income was $536 million in the fourth quarter of 2015,
compared to reported net income of $502 million in the fourth quarter
of 2014. The following table sets out our operating net income and
underlying net income for the fourth quarter of 2015 and 2014.

($ millions, after-tax)

Q4'15

Q4'14

Operating net income

598

511

Market related impacts

(36)

(21)

Assumption changes and management actions

(12)

172

Underlying net income

646

360

The Board of Directors of SLF Inc. today declared a quarterly
shareholder dividend of $0.39 per common share.

Operational Highlights
Our strategy is focused on four key pillars of growth. We detail our
continued progress against these pillars below.

Fourth Quarter Highlights

Leader in financial protection and wealth solutions in our Canadian home
market
Sales in our Canadian business units continued to grow in the final
quarter of 2015. In Individual Insurance & Wealth, wealth sales grew by
13% over the same quarter in 2014 driven by Sun Life Global Investments
(Canada) Inc. ("SLGI") mutual fund sales. Our new segregated fund
product, Sun Life Guaranteed Investment Funds, produced sales of $125
million in the fourth quarter leading to a 57% increase in segregated
fund sales over the same period in the prior year. Insurance sales grew
by 14% compared to the fourth quarter of 2014, largely driven by
participating insurance and term and personal health insurance.

SLGI reported retail sales of $383 million, up from $204 million in the
same period of the prior year. In addition, SLGI received the
Morningstar Award for "Best Pooled Fund of Fund Series" for the Granite
Target Date Series funds.

Group Retirement Services ("GRS") had total sales of $2.2 billion,
compared to $3.0 billion in the fourth quarter of 2014 which included a
single large retained case. GRS total sales were driven by strong
Defined Benefit Solutions ("DBS") sales of $898 million, where we
continued to innovate in the defined benefit space with a $530 million
annuity transaction. GRS total sales also included pension rollover
sales of $687 million in the fourth quarter of 2015, up from $481
million in the fourth quarter of 2014.

Our Group Benefits ("GB") business had sales of $78 million in the
fourth quarter, compared to $209 million in the prior year due to a
significant large case win in the fourth quarter of 2014. As a result
of overall growth in net sales, business in-force of $9.1 billion was
up 6% in the year compared to 2014.

Premier global asset manager, anchored by MFS
MFS Investment Management ("MFS") had AUM of US$413 billion as at
December 31, 2015, compared to US$404 billion as at September 30, 2015.
Gross sales were US$16.5 billion in the fourth quarter of 2015 while
net outflows were US$4.7 billion, primarily due to institutional client
net outflows.

MFS's long-term retail fund performance remained strong with 75%, 87%
and 97% of MFS's mutual fund assets ranked in the top half of their
Lipper categories based on three-, five- and ten-year performance,
respectively, as of December 31, 2015.

Sun Life Investment Management ("SLIM") completed its first full quarter
following the completion of the acquisitions made in 2015 with net
sales of $454 million and AUM of $58 billion.

Leader in U.S. group benefits and International high net worth solutions
On September 9, 2015, we entered into an agreement for the purchase of
Assurant, Inc.'s U.S. Employee Benefits business ("Assurant EB"). The
transaction is expected to close by the end of the first quarter of
2016, subject to regulatory approvals and customary closing conditions.

In U.S. Group Benefits, our actions in expense management, claims
management and pricing continued to improve the results of our U.S.
life and disability business.

In December, we re-focused our International business on the life
insurance segment, where there is greater opportunity to achieve
stronger growth and profitability and where we will continue to deliver
a strong value proposition to our customers. At the same time, the
International wealth business was closed to new sales.

Growing Asia through distribution excellence in higher growth markets
In the fourth quarter of 2015, we announced increased investments in our
joint ventures in Vietnam and India. On January 7, 2016, we increased
our ownership in our Vietnam joint venture, PVI Sun Life Insurance
Company Limited ("PVI Sun Life"), from 49% to 75%. In December 2015, we
announced an agreement to increase our ownership interest in Birla Sun
Life Insurance Company Limited ("BSLI") from 26% to 49%.The BSLI transaction is expected to be completed by the end of the first
quarter of 2016, subject to regulatory approvals and customary closing
conditions.

In SLF Asia, we had individual insurance sales of $147 million in the
fourth quarter of 2015 which reflected growth in Hong Kong, Indonesia,
India and Malaysia over the fourth quarter of 2014, offset by lower
sales in the Philippines which had exceptional sales in the fourth
quarter of 2014. Overall, wealth sales slowed during the quarter across
the region, reflecting uncertain market conditions.

Sun Life of Canada (Philippines), Inc. was awarded the "2015 Life
Insurance Company of the Year Award" in the Asia Insurance Industry
Awards. Through this award, we see recognition of our customer focus
and progress on our Most Respected Agency initiative, an important
strategy supporting our Asia growth pillar.

Annual Highlights

Leader in financial protection and wealth solutions in our Canadian home
market

During 2015, we continued to build our wealth businesses. GRS continued
to be ranked #1 in market share(1), with a very strong year in defined contribution sales. In addition,
Defined Benefit Solutions ("DBS") achieved sales of $6.6 billion driven
by a $5 billion ground-breaking large case longevity insurance
agreement and an innovative annuity transaction of $530 million. Client
Solutions pension rollover sales were also strong at $2.2 billion,
increasing by 40% from 2014. In the individual wealth market, we
launched our new segregated fund product, Sun Life Guaranteed
Investment Funds, with sales of $259 million for the year. SLGI
completed its fifth full year of operation, and continued to offer top
performing funds, with 15 of the 17 mutual funds with five-year
performance records exceeding the peer median(2).

__________

(1)

As measured by Benefits Canada magazine's 2015 CAP Suppliers Report, based on June 30, 2015 assets under administration, and released in
December 2015.

(2)

Morningstar performance statistics as at December 31, 2015.

Individual Insurance & Wealth retained its first place position in the
fixed annuities and critical illness markets at 30.6% and 30.5%,
respectively(1). Sales of insurance products grew 16% year-over-year while wealth sales
were up 13%, driven by the Career Sales Force, which increased for the
eighth consecutive year, and strong third-party channel sales activity.

GB maintained its leadership position as the top group life and health
benefits provider in Canada for the sixth consecutive year, based on
overall revenue(2).

Client Solutions, supporting all of our businesses, announced the
development of Digital Benefits Assistant, an innovative
technology-based capability that will proactively engage group plan
members, deliver personalized and relevant interactions across multiple
channels, and further support plan members in their goal of well-being
and financial security.

During 2015, we made enhancements to our Group Plan member mobile app,
including the launch of an Android app, to complement our iPhone app,
and claims submission capabilities that leverage smartphone image
capture. These investments have contributed to a 60% year-over-year
increase in our app user traffic.

For the seventh year in a row, Canadians have voted Sun Life Financial
as the "Most Trusted Life Insurance Company", part of the Reader's Digest's Trusted Brand™ awards program.

Premier global asset manager, anchored by MFS

In 2015, we completed the acquisitions of the Bentall Kennedy group of
companies ("Bentall Kennedy"), Prime Advisors, Inc. ("Prime Advisors"),
and Ryan Labs Asset Management Inc. ("Ryan Labs"). These acquisitions
build out our strategy to expand our capabilities in customized fixed
income solutions and alternative asset classes in SLIM, now part of our
asset management pillar.

SLF Asset Management's AUM were $630 billion as at December 31, 2015
compared to $501 billion as at December 31, 2014, which reflects our
acquisitions in SLIM and currency impacts from the weakening Canadian
dollar, partially offset by outflows in MFS and market depreciation.

SLIM's net sales were $1.5 billion and AUM were $58 billion as at
December 31, 2015.

Leader in U.S. group benefits and International high net worth solutions

On September 9, 2015, we entered into an agreement to acquire Assurant,
Inc.'s U.S. Employee Benefits business. The acquisition will increase
scale in our life and disability business, add a leading dental
business with the second largest dental provider network in the U.S.,
and accelerate the development of our worksite voluntary business. The
acquisition also includes Disability Reinsurance Management Services, a
business that provides turnkey disability management capabilities to
third-party carriers. The transaction is expected to close by the end
of the first quarter of 2016, subject to regulatory approvals and
customary closing conditions.

In U.S. Group Benefits, the expense, claims management and pricing
actions initiated in 2014 and continued throughout 2015 improved the
profitability of our U.S. life and disability business. Our U.S.
medical stop-loss business continued to generate strong, profitable
growth in 2015, reflecting increased sales and business in-force, and
strong margins. Stop-loss results benefited from our strong leadership
position, enhanced underwriting tools and expanded distribution.

We continued to invest in our U.S. Group Benefits business in 2015,
adding new capabilities to serve larger customers, complementing our
strength in the small and middle market segments. We also increased our
presence on private exchanges, and now participate on nine exchanges.

In International, we re-focused the business on the life insurance
segment, where there is greater opportunity to achieve growth and
profitability and where we will continue to deliver a strong value
proposition to our customers that aligns strategically to our core
competencies. At the same time, the International wealth business was
closed to new sales in December 2015.

__________

(1)

LIMRA, for the nine months ended September 30, 2015.

(2)

Fraser Group, most recently published 2015 Group Universe Report, based on revenue for the year ended December 31, 2014.

Growing Asia through distribution excellence in higher growth markets

We are strengthening our presence in Asia through agreements to increase
our joint venture ownership in PVI Sun Life in Vietnam, which was
completed on January 7, 2016, and BSLI in India, which is expected to
close by the end of the first quarter of 2016, to 75% and 49%,
respectively.

We celebrated 120 years of business as a leading life insurance company
in the Philippines. According to figures released by the country's
Insurance Commission, our Philippines operation has the leadership
position among all life insurers in the Philippines based on premium
income(1).

In SLF Asia, sales from both individual insurance and wealth have
increased compared to 2014.

Recognition

For the seventh consecutive year, SLF Inc. has been named among the 2015
Global 100 Most Sustainable Corporations in the World (the "Global
100"), announced during the World Economic Forum in Davos, Switzerland.
We are one of nine Canadian companies across all sectors, and the
top-ranked North American insurance company to make the Global 100.

Sun Life Financial was one of twelve Canadian companies selected for the
new Standard & Poor's Long Term Value Creation Global Index. The new
index, launched in January 2016, is comprised of approximately 250
stocks that have the potential to create long-term value based on
sustainability criteria and financial quality.

The Globe and Mail's Board Games ranked Sun Life Financial #1 with a score of 99 out of a
possible 100 points in the 2015 annual rating of governance practices
of Canadian Boards of Directors compiled by the Report on Business.

How We Report Our Results
We manage our operations and report our financial results in five
business segments: Sun Life Financial Canada ("SLF Canada"), Sun Life
Financial United States ("SLF U.S."), Sun Life Financial Asset
Management ("SLF Asset Management", previously reported as MFS), Sun
Life Financial Asia ("SLF Asia"), and Corporate. Information concerning
these segments is included in our annual consolidated financial
statements and accompanying notes ("Annual Consolidated Financial
Statements"), which are prepared using International Financial
Reporting Standards ("IFRS").

In the third quarter of 2015, we renamed our MFS segment to SLF Asset
Management to reflect our acquisitions of Ryan Labs Asset Management
Inc. ("Ryan Labs"), Prime Advisors, Inc. ("Prime Advisors"), and the
Bentall Kennedy group of companies ("Bentall Kennedy") in 2015. SLF
Asset Management includes the operations of MFS, our global asset
management firm, and the operations of Sun Life Investment Management
("SLIM"), our institutional investment management business. The
acquisitions of Ryan Labs, Prime Advisors and Bentall Kennedy are
included in SLIM.

Use of Non-IFRS Financial Measures
We report certain financial information using non-IFRS financial
measures, as we believe that these measures provide information that is
useful to investors in understanding our performance and facilitate a
comparison of our quarterly and full year results from period to
period. These non-IFRS financial measures do not have any standardized
meaning and may not be comparable with similar measures used by other
companies. For certain non-IFRS financial measures, there are no
directly comparable amounts under IFRS. These non-IFRS financial
measures should not be viewed as alternatives to measures of financial
performance determined in accordance with IFRS. Additional information
concerning these non-IFRS financial measures and reconciliations to the
closest IFRS measures are included in our annual and interim
management's discussion and analysis ("MD&A") and the Supplementary
Financial Information packages that are available on www.sunlife.com under Investors - Financial results & reports. Reconciliations to IFRS
measures are also available in this document under the heading
Reconciliation of Non-IFRS Financial Measures.

__________

(1)

Based on figures released in 2015 by the Insurance Commission in the
Philippines based on premium income in 2014.

Operating net income (loss) and financial measures based on operating
net income (loss), including operating earnings per share ("EPS") or
operating loss per share, and operating return on equity ("ROE"), are
non-IFRS financial measures. Operating net income (loss) excludes from
reported net income the impact of the following amounts that are not
operational or ongoing in nature to assist investors in understanding
our business performance: (i) certain hedges in SLF Canada that do not
qualify for hedge accounting; (ii) fair value adjustments on MFS's
share-based payment awards; (iii) acquisition, integration and
restructuring costs (including impacts related to acquiring and
integrating acquisitions, previously reported as restructuring and
other related costs(1)); (iv) goodwill and intangible asset impairment charges; and (v) other
items that are not operational or ongoing in nature. In 2013, operating
net income also excluded impacts related to the sale of our U.S.
Annuity Business(2), consisting of the loss on sale, related assumption changes and
management actions, and related restructuring costs. Operating EPS also
excludes the dilutive impact of convertible instruments.

Underlying net income (loss) and financial measures based on underlying
net income (loss), consisting of underlying EPS or underlying loss per
share, and underlying ROE, are non-IFRS financial measures. Underlying
net income (loss) removes from operating net income (loss) the impact
of the following items that create volatility in our results under
IFRS, and when removed assist in explaining our results from period to
period: (a) market related impacts; (b) assumption changes and
management actions; and (c) other items that have not been treated as
adjustments to operating net income, and when removed assist in
explaining our results from period to period. Market related impacts
include: (i) the impact of changes in interest rates that differ from
our best estimate assumptions in the reporting period on investment
returns and the value of derivative instruments used in our hedging
programs, including changes in credit and swap spreads, and any changes
to the assumed fixed income reinvestment rates in determining the
actuarial liabilities; (ii) the impact of changes in equity markets,
net of hedging, above or below our best estimate assumptions of
approximately 2% growth per quarter in the reporting period and of
basis risk inherent in our hedging program for products that provide
benefit guarantees; and (iii) the impact of changes in the fair value
of real estate properties in the reporting period. Additional
information regarding these adjustments is available in the footnotes
to the table included under the heading Q4 2015 vs. Q4 2014 and 2015
vs. 2014 in the Financial Summary section in this document. Assumption
changes reflect the impact of revisions to the assumptions used in
determining our liabilities for insurance contracts and investment
contracts. The impact on our liabilities for insurance contracts and
investment contracts of actions taken by management in the current
reporting period, referred to as management actions include, for
example, changes in the prices of in-force products, new or revised
reinsurance on in-force business, or material changes to investment
policies for asset segments supporting our liabilities. Underlying EPS
also excludes the dilutive impact of convertible instruments.

Other non-IFRS financial measures that we use include adjusted revenue,
administrative services only ("ASO") premium and deposit equivalents,
mutual fund assets and sales, managed fund assets and sales, premiums
and deposits, adjusted premiums and deposits, assets under management
("AUM"), assets under administration, and effective income tax rate on
an operating net income basis.

Unless indicated otherwise, all factors discussed in this document that
impact our results are applicable to reported net income (loss),
operating net income (loss) and underlying net income (loss). Reported
net income (loss) refers to Common shareholders' net income (loss)
determined in accordance with IFRS.

Additional Information
Additional information about SLF Inc. can be found in our Annual
Consolidated Financial Statements, annual and interim MD&A and Annual
Information Form ("AIF"). These documents are filed with securities
regulators in Canada and are available at www.sedar.com. SLF Inc.'s Annual Consolidated Financial Statements, annual MD&A and
AIF are filed with the United States Securities and Exchange Commission
("SEC") in SLF Inc.'s annual report on Form 40-F and SLF Inc.'s interim
MD&As and interim consolidated financial statements and accompanying
notes are furnished to the SEC on Form 6-Ks and are available at www.sec.gov.

__________

(1)

Beginning in the third quarter of 2015, we renamed the operating
adjustment Acquisition, integration and restructuring costs from
Restructuring and other related costs to accommodate acquisition and
integration adjustments arising from our 2015 activities.

(2)

Effective August 1, 2013, we completed the sale of our U.S. annuities
business and certain of our U.S. life insurance businesses
(collectively, our "U.S. Annuity Business"). For additional
information, refer to our 2014 Annual Consolidated Financial Statements
and 2013 annual MD&A.

Financial Summary

Quarterly results

Full year

($ millions, unless otherwise noted)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Net income (loss)

Operating net income (loss)(1)

598

478

731

446

511

2,253

1,920

Reported net income (loss)

536

482

726

441

502

2,185

1,762

Underlying net income (loss)(1)

646

528

615

516

360

2,305

1,816

Diluted EPS ($)

Operating EPS (diluted)(1)

0.98

0.78

1.19

0.73

0.83

3.68

3.13

Reported EPS (diluted)

0.87

0.79

1.18

0.72

0.81

3.55

2.86

Underlying EPS (diluted)(1)

1.05

0.86

1.00

0.84

0.59

3.76

2.96

Reported basic EPS ($)

0.88

0.79

1.19

0.72

0.82

3.57

2.88

Avg. common shares outstanding (millions)

612

611

612

613

613

612

611

Closing common shares outstanding (millions)

612.3

611.2

610.6

611.2

613.1

612.3

613.1

Dividends per common share ($)

0.39

0.38

0.38

0.36

0.36

1.51

1.44

MCCSR ratio(2)

240%

229 %

223 %

216 %

217 %

240%

217 %

Return on equity (%)

Operating ROE(1)

12.7%

10.5 %

16.5 %

10.4 %

12.6 %

12.6%

12.2 %

Underlying ROE(1)

13.8%

11.6 %

13.9 %

12.1 %

8.8 %

12.8%

11.6 %

Premiums and deposits

Net premium revenue

3,551

2,114

2,523

2,207

2,701

10,395

9,996

Segregated fund deposits

2,523

2,626

4,487

2,411

2,155

12,047

9,249

Mutual fund sales(1)

17,598

16,902

19,927

22,124

17,071

76,551

66,619

Managed fund sales(1)

8,327

7,507

7,002

8,243

7,988

31,079

29,868

ASO premium and deposit equivalents(1)

1,770

1,758

1,781

1,769

1,855

7,078

6,748

Total premiums and deposits(1)

33,769

30,907

35,720

36,754

31,770

137,150

122,480

Assets under management

General fund assets

155,413

151,654

145,472

148,725

139,419

155,413

139,419

Segregated funds

91,440

88,248

90,500

89,667

83,938

91,440

83,938

Mutual funds, managed funds and other AUM(1)

644,479

606,256

572,110

574,166

511,085

644,479

511,085

Total AUM(1)

891,332

846,158

808,082

812,558

734,442

891,332

734,442

Capital

Subordinated debt and innovative capital instruments(3)

3,189

3,389

2,879

2,881

2,865

3,189

2,865

Participating policyholders' equity

168

164

139

142

141

168

141

Total shareholders' equity

21,250

20,609

19,997

19,761

18,731

21,250

18,731

Total capital

24,607

24,162

23,015

22,784

21,737

24,607

21,737

(1)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

(2)

Minimum Continuing Capital and Surplus Requirements ("MCCSR") ratio of
Sun Life Assurance Company of Canada ("Sun Life Assurance").

(3)

Innovative capital instruments consist of Sun Life ExchangEable Capital
Securities and qualify as capital for Canadian regulatory purposes.
However, under IFRS they are reported as Senior debentures in our
Annual and interim Consolidated Financial Statements. For additional
information, see Capital and Liquidity Management - Capital in our 2015
annual MD&A.

Unless indicated otherwise, all factors discussed in this document that
impact our results are applicable to reported net income (loss),
operating net income (loss) and underlying net income (loss). Reported
net income (loss) refers to Common shareholders' net income (loss)
determined in accordance with IFRS.

Q4 2015 vs. Q4 2014
Our reported net incomewas $536 million in the fourth quarter of 2015, compared to $502 million
in the fourth quarter of 2014. Operating net income was $598 million
for the quarter ended December 31, 2015, compared to $511 million for
the same period in the prior year. Underlying net income was $646
million in the fourth quarter of 2015, compared to $360 million in the
fourth quarter of 2014.

Operating ROE and underlying ROE in the fourth quarter of 2015 were
12.7% and 13.8%, respectively, compared to 12.6% and 8.8% in the fourth
quarter of 2014, respectively.

The following table reconciles our net income measures and sets out the
impact that other notable items had on our net income in the fourth
quarter of 2015 and 2014.

Quarterly results

($ millions, after-tax)

Q4'15

Q4'14

Reported net income

536

502

Certain hedges that do not qualify for hedge accounting in SLF Canada

10

(6)

Fair value adjustments on MFS's share-based payment awards

(6)

1

Acquisition, integration and restructuring costs(1)

(66)

(4)

Operating net income(2)

598

511

Equity market impact

Impact from equity market changes

(1)

(8)

Basis risk impact

(3)

(1)

Equity market impact(3)

(4)

(9)

Interest rate impact

Impact from interest rate changes

(16)

(53)

Impact of credit spread movements

(10)

19

Impact of swap spread movements

(9)

13

Interest rate impact(4)

(35)

(21)

Increases (decreases) from changes in the fair value of real estate

3

9

Market related impacts

(36)

(21)

Assumption changes and management actions

(12)

172

Underlying net income(2)

646

360

Impact of other notable items on our net income:

Experience related items(5)

Impact of investment activity on insurance contract liabilities

73

35

Mortality

7

(22)

Morbidity

12

(42)

Credit

18

5

Lapse and other policyholder behaviour

(4)

(19)

Expenses

(44)

(58)

Other

23

(14)

(1)

In the fourth quarter of 2015, Acquisition, integration and
restructuring costs consisted of $63 million related to the closing of
our wealth business in SLF U.S. International to new sales, which
included assumption changes and management actions of $41 million to
reflect assumption updates including the expense strengthening
associated with closing the business, and $3 million related to our
acquisitions and integrations of Bentall Kennedy, Prime Advisors and
Ryan Labs and our pending acquisition of Assurant EB. In the fourth
quarter of 2014, restructuring costs consisted of transition costs of
$4 million related to the sale of our U.S. Annuity Business.

(2)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

(3)

Equity market impact consists primarily of the effect of changes in
equity markets during the period, net of hedging, that differ from the
best estimate assumptions used in the determination of our insurance
contract liabilities of approximately 2% growth per quarter in equity
markets. Equity market impact also includes the income impact of the
basis risk inherent in our hedging program, which is the difference
between the return on underlying funds of products that provide benefit
guarantees and the return on the derivative assets used to hedge those
benefit guarantees.

(4)

Interest rate impact includes the effect of interest rate changes on
investment returns that differ from best estimate assumptions, and on
the value of derivative instruments used in our hedging programs. Our
exposure to interest rates varies by product type, line of business and
geography. Given the long-term nature of our business, we have a higher
degree of sensitivity in respect of interest rates at long durations.
Interest rate impact also includes the income impact of changes in
assumed fixed income reinvestment rates and of credit and swap spread
movements.

(5)

Experience related items reflect the difference between actual
experience during the reporting period and best estimate assumptions
used in the determination of our insurance contract liabilities.

Our reported net income for the fourth quarter of 2015 and 2014 included
items that we believe are not operational or ongoing in nature and
which are, therefore, excluded in our calculation of operating net
income. Operating net income for the fourth quarter of 2015 and 2014
excluded the net impact of certain hedges that do not qualify for hedge
accounting in SLF Canada, fair value adjustments on MFS's share-based
payment awards, and acquisition, integration and restructuring costs.
The net impact of these items reduced reported net income by $62
million in the fourth quarter of 2015, compared to a reduction of $9
million in the fourth quarter of 2014. In addition, our operating net
income in the fourth quarter of 2015 increased by $63 million as a
result of the favourable impact of the weakening Canadian dollar
relative to the average exchange rates in the fourth quarter of 2014.

Our underlying net income for the fourth quarter of 2015 and 2014
excludes market related impacts and assumption changes and management
actions. The net impact of market related impacts and assumption
changes and management actions reduced operating net income by $48
million in the fourth quarter of 2015, compared to an increase of $151
million in the fourth quarter of 2014.

Net income in the fourth quarter of 2015 also reflected favourable
impact from investment activity on insurance contract liabilities
largely in SLF Canada and SLF U.S., positive credit and morbidity and
mortality experience, and other experience items including a change to
post-retirement benefit liabilities in SLF U.S. This was partially
offset by unfavourable expense experience including investment in
growing our businesses.

Net income in the fourth quarter of 2014 also reflected unfavourable
impacts of mortality and morbidity, lapse and other policyholder
behaviour and expense experience, mainly compensation-related and other
seasonal costs, partially offset by gains from investing activity on
insurance contract liabilities.

2015 vs. 2014
Our reported net income was $2,185 million for 2015, compared to $1,762
million in 2014. Operating net income was $2,253 million for 2015,
compared to $1,920 million in 2014. Underlying net income was $2,305
million, compared to $1,816 million in 2014.

Operating ROE and underlying ROE for 2015 were 12.6% and 12.8%,
respectively, compared to 12.2% and 11.6% in 2014, respectively.

The following table reconciles our net income measures and sets out the
impact that other notable items had on our net income in 2015 and 2014.

Full year

($ millions, after-tax)

2015

2014

Reported net income

2,185

1,762

Certain hedges that do not qualify for hedge accounting in SLF Canada

21

(7)

Fair value adjustments on MFS's share-based payment awards

(9)

(125)

Acquisition, integration and restructuring costs(1)

(80)

(26)

Operating net income(2)

2,253

1,920

Equity market impact(3)

(128)

44

Interest rate impact(4)

65

(179)

Increases (decreases) from changes in the fair value of real estate

20

12

Market related impacts

(43)

(123)

Assumption changes and management actions

(9)

227

Underlying net income(2)

2,305

1,816

Impact of other notable items on our net income:

Experience related items(5)

Impact of investment activity on insurance contract liabilities

164

125

Mortality

29

(38)

Morbidity

—

(80)

Credit

72

48

Lapse and other policyholder behaviour

(14)

(44)

Expenses

(86)

(100)

Other

2

8

Other items(6)

—

29

(1)

In 2015, Acquisition, integration and restructuring costs consisted of
$63 million related to the closing of our wealth business in SLF U.S.
International to new sales, which included assumption changes and
management actions of $41 million to reflect assumption updates
including the expense strengthening associated with closing the
business, and $17 million related to our acquisitions and integrations
of Bentall Kennedy, Prime Advisors and Ryan Labs as well as our pending
acquisition of Assurant EB. In 2014, restructuring costs consisted of
transition costs of $26 million related to the sale of our U.S. Annuity
Business.

(2)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

(3)

Equity market impact consists primarily of the effect of changes in
equity markets during the period, net of hedging, that differ from the
best estimate assumptions used in the determination of our insurance
contract liabilities of approximately 2% growth per quarter in equity
markets. Equity market impact also includes the income impact of the
basis risk inherent in our hedging program, which is the difference
between the return on underlying funds of products that provide benefit
guarantees and the return on the derivative assets used to hedge those
benefit guarantees.

(4)

Interest rate impact includes the effect of interest rate changes on
investment returns that differ from best estimate assumptions, and on
the value of derivative instruments used in our hedging programs. Our
exposure to interest rates varies by product type, line of business and
geography. Given the long-term nature of our business, we have a higher
degree of sensitivity in respect of interest rates at long durations.
Interest rate impact also includes the income impact of changes in
assumed fixed income reinvestment rates and of credit and swap spread
movements.

(5)

Experience related items reflect the difference between actual
experience during the reporting period and best estimate assumptions
used in the determination of our insurance contract liabilities.

(6)

In 2014, Other items included non-recurring tax benefits pertaining to
SLF U.K. and MFS.

Our reported net income for 2015 and 2014 included items that we believe
are not operational or ongoing in nature and which are, therefore,
excluded in our calculation of operating net income. Operating net
income for 2015 and 2014 excluded the net impact of certain hedges that
do not qualify for hedge accounting in SLF Canada, fair value
adjustments on MFS's share-based payment awards, and acquisition,
integration and restructuring costs. The net impact of these items
reduced reported net income by $68 million in 2015, compared to a
reduction of $158 million in 2014. In addition, our operating net
income for the year ended December 31, 2015 increased by $200 million
as a result of the favourable impact of the weakening Canadian dollar
relative to the average exchange rates in 2014.

Our underlying net income for 2015 and 2014 adjusts for market related
impacts and assumption changes and management actions. The net impact
of market related impacts and assumption changes and management actions
reduced operating net income by $52 million in 2015, compared to an
increase of $104 million in the same period in 2014.

Net income in 2015 also reflected favourable impact from investment
activity on insurance contract liabilities, positive credit and
mortality experience, partially offset by unfavourable expense
experience including investment in growing our businesses and lapse and
other policyholder behaviour.

Net income in 2014 also reflected gains from investment activity on
insurance contract liabilities, favourable credit experience and
business growth. This was partially offset by unfavourable impacts of
mortality and morbidity, lapse and other policyholder behaviour and
expense experience.

Annual Goodwill and Intangibles Impairment Testing
The Company completed its annual goodwill and indefinite life intangible
asset impairment testing in the fourth quarter of 2015. Impairment
charges on intangible assets of $4 million were recognized in 2015. No
impairment charges were taken as a result of this testing in 2014.

Acquisitions
Our acquisitions during the fourth quarter of 2015 (and subsequently in
2016 up to February 10, 2016) are as follows:

On January 7, 2016, we increased our ownership interest in our joint
venture insurance company in Vietnam, PVI Sun Life Insurance Company
Limited, from 49% to 75% by acquiring from PVI Holdings an additional
26% of the charter capital.

On December 2, 2015, we entered into an agreement with Aditya Birla Nuvo
Limited ("ABNL"), a part of the Aditya Birla Group, to increase our
ownership in Birla Sun Life Insurance Company Limited ("BSLI") from 26%
to 49%, the maximum permitted under foreign ownership rules in India,
for a consideration of approximately $340 million. This transaction is
expected to close by the end of the first quarter of 2016, subject to
regulatory approvals and customary closing conditions.

Impact of Foreign Exchange Rates
We have operations in many markets worldwide, including Canada, the
United States, the United Kingdom, Ireland, Hong Kong, the Philippines,
Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia
and Bermuda, and generate revenues and incur expenses in local
currencies in these jurisdictions, which are translated to Canadian
dollars. The majority of our exposure to movements in foreign exchange
rates is to the U.S. dollar.

Items impacting our Consolidated Statements of Operations, such as
Revenue, Benefits and expenses, and income, are translated to Canadian
dollars using average exchange rates for the respective period. For
items impacting our Consolidated Statements of Financial Position, such
as Assets and Liabilities, period end rates are used for currency
translation purposes. The following table provides the most relevant
foreign exchange rates over the past five quarters and two years.

Exchange Rate

Quarterly

Full year

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Average

U.S. Dollar

1.335

1.307

1.229

1.240

1.136

1.278

1.104

U.K. Pounds

2.025

2.025

1.882

1.878

1.797

1.953

1.818

Period end

U.S. Dollar

1.384

1.331

1.249

1.269

1.162

1.384

1.162

U.K. Pounds

2.040

2.014

1.962

1.880

1.809

2.040

1.809

In general, our net income benefits from a weakening Canadian dollar and
is adversely affected by a strengthening Canadian dollar as net income
from the Company's international operations is translated back to
Canadian dollars. However, in a period of losses, the weakening of the
Canadian dollar has the effect of increasing the losses. The relative
impact of foreign exchange in any given period is driven by the
movement of foreign exchange rates as well as the proportion of
earnings generated in our foreign operations. We generally express the
impact of foreign exchange on net income on a year-over-year basis.

During the fourth quarter of 2015, our operating net income increased by
$63 million as a result of the favourable impact of the weakening
Canadian dollar in the fourth quarter of 2015 relative to the average
exchange rates in the fourth quarter of 2014. In addition, during 2015,
our operating net income increased by $200 million as a result of the
favourable impact of the weakening Canadian dollar in 2015 relative to
the average exchange rates in 2014.

Performance by Business Group

SLF Canada
SLF Canada is the Canadian market leader in a number of its businesses,
providing products and services to over six million Canadians. Our
distribution breadth, strong service culture, technology leadership and
brand recognition provide an excellent platform for growth. SLF Canada
has three main business units - Individual Insurance & Wealth, Group
Benefits ("GB") and Group Retirement Services ("GRS") - which offer a
full range of protection, wealth accumulation, and income products and
services to employers, group members of company sponsored plans and
individuals in their communities across Canada.

Quarterly results

Full year

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Underlying net income (loss)(1)

269

174

250

201

181

894

823

Market related impacts

(56)

(51)

70

(69)

(54)

(106)

(77)

Assumption changes and management actions

(13)

14

11

3

(4)

15

51

Operating net income (loss)(1)

200

137

331

135

123

803

797

Hedges that do not qualify for hedge accounting

10

(10)

6

15

(6)

21

(7)

Reported net income (loss)

210

127

337

150

117

824

790

Underlying ROE (%)(1)

14.1

9.0

12.8

10.6

9.7

11.6

11.2

Operating ROE (%)(1)

10.5

7.0

17.0

7.1

6.6

10.5

10.8

Operating net income (loss) by business unit(1)

Individual Insurance & Wealth(1)

78

42

178

38

80

336

384

Group Benefits(1)

86

71

107

54

55

318

290

Group Retirement Services(1)

36

24

46

43

(12)

149

123

Total operating net income (loss)(1)

200

137

331

135

123

803

797

(1)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

Q4 2015 vs. Q4 2014
SLF Canada's reported net income was $210 million in the fourth quarter
of 2015, compared to $117 million in the fourth quarter of 2014.
Operating net income was $200 million, compared to $123 million in the
fourth quarter of 2014. Operating net income in SLF Canada excludes the
impact of certain hedges that do not qualify for hedge accounting in
2015 and 2014, which is set out in the table above.

Underlying net income in the fourth quarter of 2015 was $269 million,
compared to $181 million in the fourth quarter of 2014. Underlying net
income excludes from operating net income market related impacts and
assumption changes and management actions, which are set out in the
table above. The unfavourable effect of market related impacts in the
fourth quarter of 2015 was primarily driven by interest rates and
equity markets, compared to the unfavourable effect in the fourth
quarter of 2014, primarily driven by interest rates.

Net income in the fourth quarter of 2015 also reflected gains from
investing activities on insurance contract liabilities in Individual
Insurance & Wealth, new business gains in GRS and favourable disability
experience in GB, partially offset by expense experience including
investment in growing our individual wealth business.

Net income in the fourth quarter of 2014 also reflected gains from
investing activities on insurance contract liabilities in Individual
Insurance & Wealth and new business gains in GRS, offset by
unfavourable mortality and morbidity experience in GB and unfavourable
policyholder behaviour in Individual Insurance & Wealth.

In the fourth quarter of 2015, Individual Insurance & Wealth sales were
up 14% in insurance and 13% in wealth compared to the same period last
year due to strong third-party participating insurance sales, improved
SLGI mutual fund sales and sales of our new segregated fund, Sun Life
Guaranteed Investment Funds. Sales of SLGI retail mutual funds
increased over the fourth quarter of 2014, demonstrating continued
strong sales growth and positive momentum.

GB sales declined 63% compared to the fourth quarter of 2014 due
primarily to a significant large case sale last year. GRS new sales of
$1.3 billion improved $633 million driven by a large $530 million
combined annuity buy-in transaction. GRS retained sales in the quarter
of $251 million were lower by $1.6 billion due to a single large
retained case in the fourth quarter of last year. Pension rollover
sales of $687 million in the fourth quarter improved 43% over the
fourth quarter of 2014. Assets under administration for GRS ended the
quarter at $80.1 billion, an increase of 8% over 2014.

2015 vs. 2014
Reported net income was $824 million in 2015, compared to $790 million
in 2014. Operating net income was $803 million in 2015, compared to
$797 million in 2014. Operating net income in SLF Canada excludes the
impact of certain hedges that do not qualify for hedge accounting in
2015 and 2014, which is set out in the table above.

Underlying net income was $894 million in 2015, compared to $823 million
in 2014. Underlying net income in SLF Canada excludes from operating
net income market related impacts and assumption changes and management
actions, which are set out in the table above. The unfavourable effect
of market related impacts in 2015 was primarily driven by equity
markets and interest rates, compared to an unfavourable effect in 2014
primarily driven by interest rates, partially offset by equity markets.

Net income in 2015 also reflected gains from investing activity on
insurance contract liabilities in Individual Insurance & Wealth and new
business gains primarily in GRS. These gains were partially offset by
expense experience including investment in growing our individual
wealth business, and, during the first half of 2015, unfavourable
policyholder behaviour in Individual Insurance & Wealth. In our GB line
of business, the unfavourable impacts of high cost drug claims, though
improving in the second half of 2015, were more than offset by positive
disability experience.

Net income in 2014 also reflected new business gains in Individual
Insurance & Wealth and GRS and gains from investing activities on
insurance contract liabilities in Individual Insurance & Wealth. These
gains were partially offset by unfavourable morbidity experience in GB
and unfavourable policyholder behaviour in Individual Insurance &
Wealth.

SLF U.S.
SLF U.S. has three business units: Group Benefits, International and
In-force Management. Group Benefits provides protection solutions to
employers and employees including group life, disability, medical
stop-loss and dental insurance products, as well as a suite of
voluntary benefits products. International serves high net worth
clients in international markets, offering individual life insurance
products and serving a closed block of wealth products(1). In-force Management includes certain closed individual life insurance
products, primarily universal life and participating whole life
insurance.

__________(1) The International wealth business was closed to new sales in
December 2015.

Quarterly results

Full year

(US$ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Underlying net income (loss)(1)

118

73

85

65

9

341

240

Market related impacts

11

(16)

23

8

16

26

(37)

Assumption changes and management actions

(8)

(8)

—

(54)

121

(70)

102

Operating net income (loss)(1)

121

49

108

19

146

297

305

Acquisition, integration and restructuring costs(2)

(46)

—

—

—

—

(46)

—

Reported net income (loss)

75

49

108

19

146

251

305

Underlying ROE (%)(1)

17.4

11.2

12.7

9.7

1.3

12.8

8.9

Operating ROE (%)(1)

17.9

7.5

16.2

2.8

22.0

11.2

11.3

Operating net income (loss) by business unit(1)

Group Benefits(1)

23

16

22

38

(64)

99

(55)

International(1)

46

67

(1)

2

78

114

161

In-force Management(1)

52

(34)

87

(21)

132

84

199

Total operating net income (loss)(1)

121

49

108

19

146

297

305

(C$ millions)

Underlying net income (loss)(1)

158

97

105

81

13

441

266

Operating net income (loss)(1)

163

64

134

35

168

396

341

Reported net income (loss)

100

64

134

35

168

333

341

(1)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

(2)

In 2015, Acquisition, integration and restructuring costs consisted of
the impact of US$46 million related to the closing of our wealth
business in SLF U.S. International to new sales, which included
assumption changes and management actions of US$30 million to reflect
assumption updates including the expense strengthening associated with
closing the business.

Q4 2015 vs. Q4 2014
SLF U.S.'s reported net income was C$100 million in the fourth quarter
of 2015, compared to C$168 million in the fourth quarter of 2014.
Operating net income was C$163 million, compared to C$168 million in
the fourth quarter of 2014. Operating net income in SLF U.S. excludes
the impact of acquisition, integration and restructuring costs which
included assumption changes and management actions related to the
closing of our International wealth business to new sales in 2015,
which are set out in the table above. Underlying net income was C$158
million, compared to C$13 million in the fourth quarter of 2014. The
favourable impact of the weakening Canadian dollar relative to average
exchange rates in the fourth quarter of 2014 increased operating net
income by $24 million.

SLF U.S.'s reported net income was US$75 million in the fourth quarter
of 2015, compared to US$146 million in the fourth quarter of 2014.
Operating net income was US$121 million in the fourth quarter of 2015,
compared to US$146 million in the fourth quarter of 2014. Underlying
net income was US$118 million in the fourth quarter of 2015, compared
to US$9 million in the fourth quarter of 2014. Underlying net income
excludes from operating net income market related impacts and
assumption changes and management actions, which are set out in the
table above. The favourable effects of market related impacts in the
fourth quarter of 2015 were primarily driven by interest rate and
equity market changes, compared to a favourable effect in the fourth
quarter of 2014, primarily driven by the impact of credit spreads
partially offset by interest rate changes.

Net income in the fourth quarter of 2015 also reflected the impact in
Group Benefits related to pricing increases on new and renewing
business, expense actions, and continued investment in our disability
claim operations. Results also reflected the favourable impact of
investing activities on insurance contract liabilities, favourable
credit experience, net realized gains on the sale of available-for-sale
("AFS") assets, favourable mortality experience in International, and a
change to post-retirement benefit liabilities. These items were
partially offset by unfavourable group life claims experience.

Net income in the fourth quarter of 2014 also reflected unfavourable
underwriting experience in Group Benefits, unfavourable mortality
experience in In-force Management and International, and unfavourable
expense experience.

Sales in Group Benefits in the fourth quarter of 2015 decreased 9%
compared to the prior year quarter. International life sales in the
fourth quarter increased $13 million compared to the fourth quarter of
2014.

2015 vs. 2014
SLF U.S.'s reported net income was C$333 million in 2015, compared to
C$341 million in 2014. Operating net income was C$396 million in 2015,
compared to C$341 million in 2014. Operating net income in SLF U.S.
excludes the impact of acquisition, integration and restructuring costs
which included assumption changes and management actions related to the
closing of our International wealth business to new sales in 2015.
Underlying net income was C$441 million in 2015, compared to C$266
million in 2014. The favourable impact of the weakening Canadian dollar
in 2015 relative to average exchange rates in 2014 increased operating
net income by $54 million.

In U.S. dollars, SLF U.S.'s reported net income was US$251 million in
2015, compared to US$305 million in 2014. Operating net income was
US$297 million in 2015, compared to US$305 million in 2014. Underlying
net income was US$341 million in 2015, compared to US$240 million in
2014. Underlying net income excludes from operating net income market
related impacts and assumption changes and management actions, which
are set out in the table above. The favourable effect of market related
impacts in 2015 was primarily driven by credit spreads partially offset
by equity market changes, compared to an unfavourable impact in 2014
primarily driven by interest rates.

Net income in 2015 also reflected the impact in Group Benefits related
to pricing increases on new and renewing business, expense actions, and
continued investment in our disability claim operations. Results also
reflected positive credit experience, net realized gains on the sale of
AFS assets, favourable tax items related to prior years, the
favourable impact of investing activities on insurance contract
liabilities, favourable mortality experience in International, and a
change to post-retirement benefit liabilities. These items were
partially offset by unfavourable underwriting experience in Group
Benefits and unfavourable mortality and policyholder behaviour
experience in In-force Management.

Net income in 2014 also reflected the impact of unfavourable mortality
experience in group life and In-force Management, unfavourable
underwriting experience in our group disability business and
unfavourable expense experience, partially offset by the impact of net
realized gains on the sale of AFS assets, favourable credit experience
and positive investment activity.

MFS is a premier global asset management firm which offers a
comprehensive selection of products and services. Drawing on an
investment heritage that emphasizes collaboration and integrity, MFS
actively manages assets for retail and institutional investors around
the world through mutual and commingled funds, separately managed
accounts, institutional products and retirement strategies.

SLIM is an institutional investment management business which delivers
customized fixed income solutions, including liability-driven investing
and a suite of alternative, yield-oriented asset classes, including
private fixed income, real estate and commercial mortgages. SLIM
consists of the businesses of Bentall Kennedy, Prime Advisors, Ryan
Labs and SLIM Inc. that offer a comprehensive set of capabilities to
institutional investors.

Quarterly results

Full year

SLF Asset Management (C$ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Operating net income and underlying net income(1)

183

176

173

168

156

700

616

Fair value adjustments on MFS's share-based payment awards

(6)

28

(11)

(20)

1

(9)

(125)

Reported net income (loss)

177

204

162

148

157

691

491

Assets under management (C$ billions)(2)

629.6

593.0

558.3

559.9

500.7

629.6

500.7

Gross sales (C$ billions)(2)

24.2

22.7

25.3

28.2

23.3

100.5

91.1

Net sales (C$ billions)(2)

(5.8)

(11.2)

(1.8)

(0.2)

(2.2)

(19.0)

1.2

MFS (C$ millions)

Operating net income (loss)(1)

174

173

173

168

156

688

616

Fair value adjustments on MFS's share-based payment awards

(6)

28

(11)

(20)

1

(9)

(125)

Reported net income (loss)

168

201

162

148

157

679

491

Assets under management (C$ billions)(2)

571.9

537.4

550.2

559.9

500.7

571.9

500.7

Gross sales (C$ billions)(2)

22.0

21.5

24.7

28.2

23.3

96.5

91.1

Net sales (C$ billions)(2)

(6.2)

(11.8)

(2.2)

(0.2)

(2.2)

(20.5)

1.2

(US$ millions)

Operating net income (loss)(1)

131

133

141

135

137

540

557

Fair value adjustments on MFS's share-based payment awards

(5)

21

(9)

(16)

—

(9)

(114)

Reported net income (loss)

126

154

132

119

137

531

443

Pre-tax operating profit margin ratio(2)

38%

40%

40%

40%

39%

40%

41%

Average net assets (US$ billions)(2)

420.2

429.5

450.3

436.4

427.3

434.0

425.5

Assets under management (US$ billions)(2)(3)

413.2

403.7

440.5

441.4

431.0

413.2

431.0

Gross sales (US$ billions)(2)

16.5

16.5

20.1

22.8

20.5

75.8

82.5

Net sales (US$ billions)(2)

(4.7)

(9.0)

(1.8)

(0.2)

(1.9)

(15.7)

1.2

Asset appreciation (depreciation) (US$ billions)

14.2

(27.8)

0.9

10.6

8.1

(2.1)

17.0

S&P 500 Index (daily average)

2,057

2,027

2,102

2,064

2,012

2,061

1,926

MSCI EAFE Index (daily average)

1,732

1,785

1,906

1,817

1,795

1,809

1,888

SLIM (C$ millions)

Operating net income (loss)(1)

9

3

12

Reported net income (loss)

9

3

12

Assets under management (C$ billions)(2)(4)

57.8

55.6

8.1

57.8

Gross sales (C$ billions)(2)(4)

2.2

1.2

0.6

4.0

Net sales (C$ billions)(2)(4)

0.5

0.6

0.4

1.5

(1)

Represents a non-IFRS financial measure that excludes fair value
adjustments on share-based payment awards at MFS. For SLF Asset
Management, operating net income is generally expected to be equal to
underlying net income. See Use of Non-IFRS Financial Measures and
Reconciliation of Non-IFRS Financial Measures.

Monthly Information on AUM is provided by MFS in its Corporate Fact
Sheet, which can be found in the About MFS section of its website at www.mfs.com/CorpFact.

(4)

Beginning in the third quarter of 2015, we are reporting SLIM's AUM,
gross sales and net sales in the SLF Asset Management segment as
described under the heading How we report our results. In the second
quarter of 2015, the AUM, gross sales and net sales were previously
included in the Corporate segment.

Q4 2015 vs. Q4 2014
SLF Asset Management's reported net income was C$177 million in the
fourth quarter of 2015, compared to C$157 million in the fourth quarter
of 2014. SLF Asset Management had operating net income and underlying
net income of C$183 million in the fourth quarter of 2015, compared to
C$156 million in the fourth quarter of 2014. Operating net income and
underlying net income in SLF Asset Management excludes the impact of
fair value adjustments on MFS's share-based payment awards, which is
set out in the table above. The favourable impact of the weakening
Canadian dollar in the fourth quarter of 2015 relative to average
exchange rates in the fourth quarter of 2014 increased operating net
income by $27 million.

SLF Asset Management's net income increased in the fourth quarter of
2015 compared to the same period in 2014 primarily due to the
favourable impact of exchange rates.

In U.S. dollars, MFS's reported net income was US$126 million in the
fourth quarter of 2015, compared to US$137 million in the fourth
quarter of 2014. MFS's operating net income was US$131 million in the
fourth quarter of 2015, compared to US$137 million in the fourth
quarter of 2014. Operating net income in MFS excludes the impact of
fair value adjustments on share-based payment awards, which is set out
in the table above. MFS's operating net income in U.S. dollars
decreased in the fourth quarter of 2015 compared to the same period in
2014, primarily due to lower average net assets. MFS's pre-tax
operating profit margin ratio was 38% in the fourth quarter of 2015,
down from 39% in the fourth quarter of 2014.

SLIM's reported net income and operating net income was C$9 million in
the fourth quarter of 2015. SLIM's net income in the fourth quarter of
2015 primarily reflected the 2015 acquisitions in SLIM.

SLF Asset Management's AUM was C$629.6 billion as at December 31, 2015,
compared to C$500.7 billion as at December 31, 2014. The increase in
SLF Asset Management's AUM was primarily due to the acquisitions in
SLIM in the third quarter of 2015. MFS's AUM was US$413.2 billion
(C$571.9 billion) as at December 31, 2015, compared to US$431.0 billion
(C$500.7 billion) as at December 31, 2014. The decrease of US$17.8
billion was primarily driven by gross sales of US$75.8 billion, more
than offset by redemptions of US$91.5 billion and asset depreciation of
US$2.1 billion. Market volatility during the second half of 2015
contributed to a decrease in gross sales across MFS's retail and
institutional product lines. In addition, some large institutional
clients rebalanced their investments leading to redemptions that were
larger than usual. These factors were the major drivers to MFS's net
outflows in the third and fourth quarters. MFS's investment performance
remains strong with 75%, 87% and 97% of MFS's retail fund assets ranked
in the top half of their Lipper categories based on three-, five- and
ten-year performance, respectively at December 31, 2015. SLIM's AUM was
C$57.8 billion as at December 31, 2015.

2015 vs. 2014
SLF Asset Management's reported net income was C$691 million in 2015,
compared to C$491 million to 2014. SLF Asset Management had operating
net income and underlying net income of C$700 million in 2015, compared
to C$616 million in 2014. Operating net income and underlying net
income in SLF Asset Management excludes the impact of fair value
adjustments on MFS's share-based payment awards, which is set out in
the table above. The favourable impact of the weakening Canadian dollar
in 2015 relative to average exchange rates in 2014 increased operating
net income by $95 million.

MFS's reported net income for 2015 was US$531 million, compared to
US$443 million for 2014. MFS's operating net income was US$540 million
in 2015, compared to US$557 million in 2014. MFS's operating net income
in U.S. dollars for the year ended December 31, 2015 decreased compared
to the same period in the prior year, primarily due to compensation
costs and continued investment in technological infrastructure
partially offset by higher average net assets.

SLIM's reported net income and operating net income for the year ended
December 31, 2015 was C$12 million. SLIM's net income in 2015 primarily
reflected the results of the 2015 acquisitions in SLIM.

SLF Asia
SLF Asia operates through subsidiaries in the Philippines, Hong Kong,
Indonesia and Vietnam(1) as well as through joint ventures with local partners in the
Philippines, Indonesia, Malaysia, China and India. We offer individual
life insurance products in all seven markets, and group benefits and/or
pension and retirement products in the Philippines, China, Hong Kong,
India, Malaysia and Vietnam. We have also established asset management
companies either directly or through joint ventures and associates in
the Philippines, China and India. We distribute these protection and
wealth products to middle- and upper-income individuals, groups and
affinity clients through multiple distribution channels.

__________(1) We increased our ownership stake in PVI Sun Life in Vietnam from 49%
to 75% on January 7, 2016.

Quarterly results

Full year

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Underlying net income (loss)(1)

52

67

71

62

50

252

174

Market related impacts

7

(17)

19

10

(8)

19

(12)

Assumption changes and management actions

14

27

3

(4 )

20

40

20

Operating net income (loss)(1)

73

77

93

68

62

311

182

Reported net income (loss)

73

77

93

68

62

311

182

Underlying ROE (%)(1)

5.6

7.8

8.4

7.7

6.8

7.4

6.5

Operating ROE (%)(1)

8.0

9.1

11.0

8.6

8.4

9.2

6.8

(1) Represents a non-IFRS financial measure. See Use of Non-IFRS
Financial Measures and Reconciliation of Non-IFRS Financial Measures.

Q4 2015 vs. Q4 2014
SLF Asia's reported net income and operating net income was $73 million
in the fourth quarter of 2015, compared to reported net income and
operating net income of $62 million in the fourth quarter of 2014.
There were no operating net income adjustments in SLF Asia in 2015 or
2014. The favourable impact of the weakening Canadian dollar in the
fourth quarter of 2015 relative to average exchange rates in the fourth
quarter of 2014 increased operating net income by $9 million.

Underlying net income was $52 million, compared to $50 million in the
fourth quarter of 2014. Underlying net income excludes from operating
net income market related impacts and assumption changes and management
actions, which are set out in the table above. The favourable effect of
market related impacts in the fourth quarter of 2015 were primarily
driven by interest rate and equity market changes, compared to the
unfavourable effect in the fourth quarter of 2014, primarily driven by
interest rate and equity market changes.

Net income in the fourth quarter of 2015 reflected business growth
partially offset by lower gains from the sale of AFS assets compared to
the fourth quarter of 2014.

Total individual life sales in the fourth quarter of 2015 were up 11%
from the fourth quarter of 2014, or down 1% excluding currency impact.
This reflects growth in Malaysia, Hong Kong, Indonesia and India, up
40%, 16%, 6% and 4%, respectively, in local currency, offset by lower
sales in the Philippines, which had exceptional sales in the fourth
quarter of 2014, Vietnam and China. Sales increases were driven by
growth in our agency channel in Hong Kong, Indonesia and India, and in
bancassurance sales in Malaysia and Indonesia. SLF Asia wealth sales
were $1.7 billion, compared to $2.2 billion in the fourth quarter of
2014, driven by decreased sales in China, India and Hong Kong mainly
due to market volatility.

2015 vs. 2014
Reported net income and operating net income was $311 million in 2015,
compared to reported net income and operating net income of $182
million in 2014. There were no operating net income adjustments in SLF
Asia in 2015 or 2014. The favourable impact of the weakening Canadian
dollar in 2015 relative to average exchange rates in 2014 increased
operating net income by $35 million.

Underlying net income was $252 million, compared to $174 million in
2014. Underlying net income excludes from operating net income market
related impacts and assumption changes and management actions, which
are set out in the table above. The favourable effect of market related
impacts in 2015 was primarily driven by interest rate and equity market
changes, compared to an unfavourable effect in 2014 primarily driven by
interest rates partially offset by equity market changes.

Net income in 2015 increased compared to 2014, primarily driven by
business growth.

Individual life insurance sales in 2015 were up 16% from 2014, or
increased by 4% excluding currency impact. Sales increased across the
region, except in China and India, with agency sales growth in the
Philippines, Indonesia and Vietnam of 16%, 23% and 85%, respectively,
measured in local currency. Sales in Malaysia were up 29%, driven by
growth in the bancassurance and telemarketing channels. Sales in Hong
Kong were level with 2014. Wealth sales increased from 2014, driven by
increases in India and China.

Corporate
Corporate includes the results of SLF U.K. and Corporate Support.
Corporate Support includes our Run-off reinsurance business as well as
investment income, expenses, capital and other items that have not been
allocated to our other business segments. SLF U.K. has a run-off block
of business which has been closed to new business and focuses on
supporting existing customers.

Quarterly results

Full year

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Underlying net income (loss)(1)

(16)

14

16

4

(40)

18

(63)

Market related impacts

(2)

9

(21)

28

23

14

6

Assumption changes and management actions

(3)

1

5

8

19

11

41

Operating net income (loss)(1)

(21)

24

—

40

2

43

(16)

Acquisition, integration and restructuring costs(2)

(3)

(14)

—

—

(4)

(17)

(26)

Reported net income (loss)

(24)

10

—

40

(2)

26

(42)

Operating net income (loss) by business unit(1)

SLF U.K.(1)

22

70

37

71

65

200

174

Corporate Support(1)

(43)

(46)

(37)

(31)

(63)

(157)

(190)

Total operating net income (loss)(1)

(21)

24

—

40

2

43

(16)

(1)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

(2)

In 2015, Acquisition, integration and restructuring costs primarily
related to our acquisitions and integrations of Bentall Kennedy, Prime
Advisors and Ryan Labs and our pending acquisition of Assurant EB. In
2014, restructuring costs consisted of transition costs related to the
sale of our U.S. Annuity Business.

Q4 2015 vs. Q4 2014
Corporate had reported net loss of $24 million in the fourth quarter of
2015, compared to reported loss of $2 million in the fourth quarter of
2014. Operating net loss was $21 million in the fourth quarter of 2015,
compared to an operating net income of $2 million in the same period in
the prior year. Operating net income (loss) excludes acquisition,
integration and restructuring costs in 2015 and 2014, which are set out
in the table above. The favourable impact of the weakening Canadian
dollar in the fourth quarter of 2015 relative to average exchange rates
in the fourth quarter of 2014 decreased operating net loss by $3
million.

Underlying net loss was $16 million, compared to underlying net loss of
$40 million in the fourth quarter of 2014. Underlying net income (loss)
excludes from operating net income (loss) market related impacts and
assumption changes and management actions, which are set out in the
table above. The unfavourable effect of market related impacts in the
fourth quarter of 2015 were primarily driven by equity markets
partially offset by interest rates, compared to the favourable effect
in the fourth quarter of 2014, primarily driven by interest rates.

SLF U.K.'s operating net income was $22 million in the fourth quarter of
2015, compared to $65 million in the fourth quarter of 2014. SLF U.K.'s
net income in the fourth quarter of 2015 reflected unfavourable equity
markets and the impact of a tax rate change partially offset by the
impact of interest rates. Net income in the fourth quarter of 2014
reflected the favourable impact of assumption changes and management
actions and market related impacts.

Corporate Support had an operating net loss of $43 million in the fourth
quarter of 2015, compared to an operating net loss of $63 million in
the fourth quarter of 2014. Net loss in the fourth quarter of 2015
declined relative to the same period in 2014, primarily due to lower
operating expenses.

2015 vs. 2014
The reported net income was $26 million in the Corporate segment in
2015, compared to a reported net loss of $42 million in 2014. Operating
net income was $43 million in 2015, compared to an operating net loss
of $16 million in 2014. Operating net income (loss) excludes
acquisition, integration and restructuring costs in 2015 and 2014,
which are set out in the table above. The favourable impact of the
weakening Canadian dollar in 2015 relative to average exchange rates in
2014 increased operating net income by $16 million.

Underlying net income was $18 million in 2015, compared to an underlying
net loss of $63 million in 2014. Underlying net income (loss) excludes
from operating net income (loss) market related impacts and assumption
changes and management actions, which are set out in the table above.
The favourable effect of market related impacts in 2015 was primarily
driven by interest rates partially offset by equity markets, compared
to a favourable effect in 2014, primarily driven by interest rates and
partially offset by equity markets.

SLF U.K.'s operating net income was $200 million in 2015, compared to
$174 million in 2014. Net income in 2015 reflected favourable effect of
interest rates, currency impacts, policyholder behaviour, mortality
experience, and assumption changes and management actions, partially
offset by equity markets. Net income in 2014 included favourable impact
of assumption changes and management actions and non-recurring
tax-related items, partially offset by other unfavourable experience
items.

In Corporate Support, the operating net loss was $157 million in 2015,
compared to an operating net loss of $190 million in 2014. The decrease
in loss in 2015 relative to 2014 was due to lower preferred share
dividends, tax benefits, and lower expenses.

Additional Financial Disclosure

Revenue

Quarterly results

Full year

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Premiums

Gross

5,163

3,835

4,103

3,723

4,023

16,824

15,499

Ceded

(1,612)

(1,721)

(1,580)

(1,516)

(1,322)

(6,429)

(5,503)

Net premium

3,551

2,114

2,523

2,207

2,701

10,395

9,996

Net investment income

Interest and other investment income

1,327

1,362

1,320

1,279

1,258

5,288

4,941

Fair value and foreign currency changes on assets and liabilities

(788)

(168)

(3,500)

2,495

2,196

(1,961)

6,172

Net gains (losses) on available-for-sale assets

39

47

46

96

49

228

202

Fee income

1,438

1,338

1,293

1,255

1,171

5,324

4,453

Total revenue

5,567

4,693

1,682

7,332

7,375

19,274

25,764

Adjusted revenue(1)

7,030

5,668

6,113

5,783

6,333

24,332

24,157

(1)

Adjusted revenue is a non-IFRS financial measure that adjusts revenue
for the impact of Constant Currency Adjustment, FV Adjustment, and
Reinsurance in SLF Canada's GB Operations Adjustment as described in
Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS
Financial Measures.

Revenue was $5.6 billion in the fourth quarter of 2015, compared to $7.4
billion in the fourth quarter of 2014. The decrease was primarily
driven by decreases in the fair value of fair value through profit and
loss ("FVTPL") assets, partially offset by higher net premium revenue
in SLF Canada and SLF Asia, favourable currency impact from the
weakening Canadian dollar, and higher fee income in SLF Asset
Management and SLF Canada. The currency impact from the weakening of
the Canadian dollar relative to average exchange rates in the fourth
quarter of 2014 increased revenue by $393 million. Adjusted revenue was
$7.0 billion in the fourth quarter of 2015, compared to $6.3 billion in
the fourth quarter of 2014 primarily due to increased net premium
revenue in SLF Canada and SLF Asia, and higher fee income in SLF Asset
Management and SLF Canada.

Revenue of $19.3 billion in 2015 was down $6.5 billion from revenue of
$25.8 billion in 2014. The decrease was primarily driven by decreases
in the fair value of FVTPL assets and lower net premium revenue in SLF
U.S., partially offset by favourable currency impact from the weakening
Canadian dollar, higher net premium revenue in SLF Canada and SLF Asia,
and increased fee income in SLF Asset Management and SLF Canada. The
weakening of the Canadian dollar relative to average exchange rates in
2014 increased revenue by $1.4 billion. Adjusted revenue in 2015 was
$24.3 billion, an increase of $0.1 billion from 2014. The increase in
adjusted revenue was primarily attributable to increased net premium
revenue in SLF Canada and SLF Asia, and higher fee income in SLF Asset
Management and SLF Canada, partially offset by lower net premium
revenue in SLF U.S primarily due to lower International sales.

Premiums and Deposits

Quarterly results

Full year

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

2015

2014

Net premium revenue

3,551

2,114

2,523

2,207

2,701

10,395

9,996

Segregated fund deposits

2,523

2,626

4,487

2,411

2,155

12,047

9,249

Mutual fund sales(1)

17,598

16,902

19,927

22,124

17,071

76,551

66,619

Managed fund sales(1)

8,327

7,507

7,002

8,243

7,988

31,079

29,868

ASO premium and deposit equivalents(1)

1,770

1,758

1,781

1,769

1,855

7,078

6,748

Total premiums and deposits(1)

33,769

30,907

35,720

36,754

31,770

137,150

122,480

Total adjusted premiums and deposits(1)(2)

30,937

28,823

34,727

35,276

32,924

126,753

127,045

(1)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures.

(2)

Adjusted premium and deposits is a non-IFRS financial measure that
excludes from premiums and deposits the impact of Constant Currency
Adjustment and Reinsurance in SLF Canada's GB Operations Adjustment as
described in Use of Non-IFRS Financial Measures and Reconciliation of
Non-IFRS Financial Measures.

Premiums and depositswere $33.8 billion for the quarter ended December 31, 2015, compared to
$31.8 billion for the quarter ended December 31, 2014. The weakening of
the Canadian dollar relative to average exchange rates in the fourth
quarter of 2014 increased total premiums and deposits by approximately
$4.0 billion. Total adjusted premiums and deposits in the fourth
quarter of 2015 were down $2.0 billion compared to the same period last
year. The decrease was mainly due to SLF Asset Management, with lower
fund sales in MFS partially offset by fund sales in SLIM including the
2015 acquisitions, and increased net premium revenue and segregated
fund deposits in SLF Canada.

Net premium revenue, which reflect gross premiums less amounts ceded to
reinsurers, were $3.6 billion in the fourth quarter of 2015, compared
to $2.7 billion in the fourth quarter of 2014. Net life, health and
annuity premium revenues were $10.4 billion for 2015, up $0.4 billion
from 2014. In both cases, the increase was primarily attributable to
favourable currency impact from the weakening Canadian dollar, and
increases in SLF Canada and SLF Asia, partially offset by decreases in
SLF U.S.

Segregated fund deposits were $2.5 billion in the fourth quarter of
2015, compared to $2.2 billion in the fourth quarter of 2014.
Segregated fund deposits were $12.0 billion in 2015, compared to $9.2
billion in 2014. In both cases, the change mainly reflected an increase
in GRS in SLF Canada, and favourable currency impact from the weakening
Canadian dollar, partially offset by lower deposits in SLF Asia.

Sales of mutual funds and managed funds were $25.9 billion in the fourth
quarter of 2015, an increase of $0.8 billion over the fourth quarter of
2014, reflecting favourable currency impact from the weakening Canadian
dollar, fund sales in SLIM and SLF Canada, partially offset by lower
fund sales in MFS and SLF Asia. Mutual and managed fund sales were
$107.6 billion in 2015, compared to $96.5 billion in 2014, primarily
driven by favourable currency impact from the weakening Canadian dollar
and fund sales in SLIM, SLF Canada and SLF Asia, partially offset by
lower fund sales in MFS.

ASO premium and deposit equivalents of $1.8 billion in the fourth
quarter of 2015 were down $0.1 billion from the fourth quarter of 2014,
mainly reflecting decreases from GRS in SLF Canada, partially offset by
increases in GB in SLF Canada, Hong Kong in SLF Asia and the favourable
currency impact from the weakening Canadian dollar. ASO premium and
deposit equivalents for 2015 increased $0.4 billion from 2014,
primarily attributable to increases from GB in SLF Canada, Hong Kong in
SLF Asia and the favourable currency impact from the weakening Canadian
dollar, partially offset by decreases from GRS in SLF Canada.

Sales
In SLF Canada, life and health sales consist of sales of individual
insurance and group benefits products; wealth sales consist of sales of
individual wealth products and sales in GRS. In SLF U.S., life and
health sales consist of sales by Group Benefits and individual life
sales by International; wealth sales consist of investment product
sales in International(1). In SLF Asia, life and health sales consist of the individual and group
life and health sales from subsidiaries, joint ventures and associates
based on our proportionate equity interest in the Philippines, Hong
Kong, Indonesia, India, China, Malaysia, and Vietnam(2); wealth sales consist of Hong Kong wealth sales, Philippines mutual
fund sales, wealth sales from the India and China insurance companies,
and Birla Sun Life Asset Management Company's equity and fixed income
mutual fund sales based on our proportionate equity interest. SLF Asset
Management sales consist of gross sales (inflows) for retail and
institutional clients.

__________

(1)

The International wealth business was closed to new sales in December
2015.

(2)

We increased our ownership stake in PVI Sun Life in Vietnam from 49% to
75% on January 7, 2016.

($ millions)

Q4'15

Q4'14

Life and health sales(1)

SLF Canada

178

297

SLF U.S.

427

381

SLF Asia

162

138

Total life and health sales

767

816

Wealth sales(1)

SLF Canada

3,585

4,213

SLF U.S.

96

161

SLF Asia

1,706

2,222

Total wealth sales excluding SLF Asset Management

5,387

6,596

SLF Asset Management sales(1)

24,247

23,294

Total wealth sales

29,634

29,890

(1)

Represents a non-IFRS financial measure. See Use of Non-IFRS Financial
Measures.

Total Company life and health sales were $767 million in the fourth
quarter of 2015, compared to $816 million in the same period last year.

SLF Canada life and health sales were $178 million in the fourth quarter
of 2015, compared to $297 million in the fourth quarter of 2014,
primarily reflecting lower sales in GB, partially offset by higher
sales in the Individual insurance business

SLF U.S. life and health sales were $427 million in the fourth quarter
of 2015, compared to $381 million in the fourth quarter of 2014,
largely due to favourable currency impact of $63 million from the
weakening Canadian dollar and higher sales in individual insurance in
International, partially offset by lower sales in Group Benefits

SLF Asia life and health sales were $162 million in the fourth quarter
of 2015, compared to $138 million in the fourth quarter of 2014, mainly
attributable to favourable currency impact of $18 million from the
weakening Canadian dollar and sales growth in Hong Kong, Indonesia,
China and Malaysia

Total Company wealth sales were $29.6 billion in the fourth quarter of
2015, compared to $29.9 billion in the fourth quarter of 2014.

SLF Canada wealth sales were $3.6 billion in the fourth quarter of 2015,
compared to $4.2 billion in the fourth quarter of 2014, mainly
reflecting lower retained sales in GRS, partially offset by higher
sales in the Individual wealth business

SLF U.S. wealth sales were $96 million in the fourth quarter of 2015,
compared to $161 million in the fourth quarter of 2014, due to lower
wealth product sales in International, partially offset by favourable currency impact of $14 million from the
weakening Canadian dollar

SLF Asia wealth sales were $1.7 billion in the fourth quarter of 2015,
compared to $2.2 billion in the fourth quarter of 2014, driven by
decreased fund sales in China, India and Hong Kong, partially offset by
the favourable currency impact of $0.2 billion from the weakening
Canadian dollar

Assets Under Management
AUM consist of general funds, segregated funds and other AUM. Other AUM
includes mutual funds and managed funds, which include institutional
and other third-party assets managed by the Company.

AUMwere $891.3 billion as at December 31, 2015, compared to AUM of $734.4
billion as at December 31, 2014. The increase in AUM of $156.9 billion
between December 31, 2015 and December 31, 2014 resulted primarily
from:

(i)

an increase of $111.3 billion from the favourable currency impact of the
weakening of the Canadian dollar against foreign currencies compared to
the prior period exchange rates;

(ii)

$52.3 billion increase from the acquisition of Ryan Labs, Prime Advisors
and Bentall Kennedy; and

Changes in the Statements of Financial Position and in Shareholders'
Equity
Total general fund assets were $155.4 billion as at December 31, 2015,
compared to $139.4 billion as at December 31, 2014. The increase in
general fund assets from December 31, 2014 was primarily a result of
currency impact of the weakening Canadian dollar of $10.8 billion and
business growth of $7.2 billion, partially offset by a $2.0 billion
decrease from the change in value of FVTPL assets and liabilities.

Insurance contract liabilities (excluding other policy liabilities and
assets) of $103.7 billion as at December 31, 2015 increased by $8.5
billion compared to December 31, 2014, mainly due to currency impact
from the weakening Canadian dollar and balances arising from new
policies, partially offset by changes in balances on in-force policies
(which includes fair value changes on FVTPL assets supporting insurance
contract liabilities).

Shareholders' equity, including preferred share capital, was $21.3
billion as at December 31, 2015, compared to $18.7 billion as at
December 31, 2014. The $2.6 billion increase in shareholders' equity
was primarily due to:

(i)

shareholders' net income of $2,285 million in 2015, before preferred
share dividends of $100 million;

(ii)

an increase of $1,645 million from the weakening of the Canadian dollar
relative to foreign currencies; and

(iii)

proceeds of $88 million from the issuance of common shares through the
Canadian dividend reinvestment and share purchase plan, $34 million
issued as consideration for business acquisition, $44 million from
stock options exercised and $3 million from stock-based compensation;
partially offset by

(iv)

common share dividend payments of $918 million;

(v)

common share repurchases of $212 million;

(vi)

net change in AFS assets in other comprehensive income ("OCI") of $298
million; and

(vii)

changes in liabilities for defined benefit plans in OCI of $49 million.

Income Taxes
In the fourth quarter of 2015, on a reported basis we had an Income tax
expense of $180 million on Income before taxes of $741 million, which
resulted in an effective income tax rate of 24.3%. This compares to an
Income tax expense of $124 million on Income before taxes of $658
million and an effective income tax rate of 18.8% in the fourth quarter
of 2014.

On an operating basis(1), in the fourth quarter of 2015, we had an income tax expense of $190
million on our operating income of $826 million, representing an
effective income tax rate of 23.0%. This compares to an income tax
expense of $113 million on operating income before taxes of $665
million and an effective income tax rate of 17.0% in the fourth quarter
of 2014. The effective tax rate calculated on an operating basis
excludes amounts attributable to participating policyholders and
non-operating items.

The provincial corporate tax rate increased in Alberta, Canada effective
the second quarter of 2015, and as a result, our statutory tax rate
increased from 26.5% to 26.75% for 2015 and future years. Our statutory
tax rate is normally reduced by various tax benefits, such as lower
taxes on income subject to tax in foreign jurisdictions, a range of tax
exempt investment income and other sustainable tax benefits that are
expected to decrease our effective tax rate to a range of 18% to 22%.

Our effective tax rate in the fourth quarter of 2015 was above the
expected range mainly due to the impact of a tax rate change in the
U.K., partially offset by adjustments with respect to prior years and
resolution of tax audits.

Our effective tax rate in the fourth quarter of 2014 was further reduced
due to favourable adjustments to taxes of prior years, which were
offset by an accrual of interest expense related to taxes recorded in
pre-tax income.

__________(1) Our effective income tax rate on an operating net income basis is
calculated using operating net income and income tax expense
associated with operating net income.

Investments
We had total general fund invested assets of $138.0 billion as at
December 31, 2015, compared to $125.2 billion as at December 31, 2014.
The increase in general fund invested assets of $12.8 billion was
primarily due to the currency impact of the weakening Canadian dollar
and operating activity partially offset by a decrease from changes in
fair value. Our general fund is primarily invested in fixed income
instruments, including debt securities and mortgages and loans, with
85.5% of the general fund invested assets invested in cash and fixed
income investments. Equity securities and investment properties
represented 3.8% and 4.7% of the portfolio, respectively and the
remaining 6.0% of the portfolio consisted of policy loans, derivative
assets and other invested assets. Our general fund invested assets are
well diversified across investment types, geographies and sectors.

The following table sets out the composition of our general fund
invested assets(1).

December 31, 2015

December 31, 2014

($ millions)

Carryingvalue

% of totalcarrying value

Carrying
value

% of total
carrying value

Cash, cash equivalents and short-term securities

8,983

6.5%

6,818

5.4 %

Debt securities - FVTPL

56,785

41.2%

53,127

42.4 %

Debt securities - AFS

13,111

9.5%

13,087

10.5 %

Equity securities - FVTPL

4,426

3.2%

4,357

3.5 %

Equity securities - AFS

887

0.6%

866

0.7 %

Mortgages and loans

39,103

28.3%

33,679

26.9 %

Derivative assets

1,866

1.4%

1,839

1.5 %

Other invested assets

3,111

2.3%

2,375

1.9 %

Policy loans

3,151

2.3%

2,895

2.3 %

Investment properties

6,540

4.7%

6,108

4.9 %

Total invested assets

137,963

100%

125,151

100 %

(1)

The invested asset values and ratios presented are based on the carrying
value of the respective asset categories. The carrying values for FVTPL and AFS invested assets are generally equal to their fair
values. For invested assets supporting insurance contracts, in the
event of default, if the amounts recovered are insufficient to satisfy the
related insurance contract liability cash flows that the assets are
intended to support, credit exposure may be greater than the carrying value of the
assets.

Sector Exposure
Our general fund invested assets are well diversified across investment
types, geographies and sectors.

As at December 31, 2015, our exposure to the energy sector for debt
securities and corporate loans was $5.6 billion, of which 93% was rated
investment grade ($5.5 billion, of which 98% was rated investment grade
as at December 31, 2014). Approximately 45% of our energy sector
exposure was invested in pipeline, storage and transportation entities,
approximately 15% was invested in integrated oil and gas entities, and
the remaining exposure was invested in companies involved in
exploration and production, refining and drilling and servicing, which
included approximately 7% in drilling and oil field services.

Our mortgage and real estate portfolio includes office, industrial,
retail, and multi-family buildings occupied by tenants in diversified
industries. Our most significant property exposure to the oil and gas
sector was located in Alberta, which represented approximately 8% of
our mortgage portfolio and approximately 21% of our real estate
portfolio. Within our Alberta portfolio, there has been no significant
change in exposure to energy sector tenants and there have been no
material indications of stress such as arrears, mortgage defaults and
tenant insolvencies. However, as the period of weak energy prices
continues, market fundamentals within the province are deteriorating,
resulting in rising vacancy levels and lower rental rates, which should
they continue, may lead to further reductions in valuations
particularly in the office sector. We continue to closely monitor the
impact of these market changes in the energy sector on the real estate
and mortgage portfolios.

As at December 31, 2015, our exposure to the metals and mining
sub-sector consists of debt securities and was $0.8 billion, of which
97% is investment grade and is diversified by several different
commodity types. The metals and mining sub-sector is included in the
Materials line of the Debt Securities by Issuer and Industry Sector
table included in the Debt Securities section of our 2015 annual MD&A.

Debt Securities
Our debt securities portfolio is actively managed through a regular
program of purchases and sales aimed at optimizing yield, quality and
liquidity, while ensuring that it remains well diversified and
duration-matched to insurance contract liabilities. As at December 31,
2015, we held $69.9 billion of debt securities, representing 50.7% of
our total invested assets, compared to $66.2 billion representing 52.9%
as at December 31, 2014. Debt securities with a credit rating of "A" or
higher represented 67.9% of the total debt securities as at
December 31, 2015, consistent with December 31, 2014. Debt securities
with a credit rating of "BBB" or higher represented 96.9% of total debt
securities as at December 31, 2015, compared to 97.3% as at
December 31, 2014.

Corporate debt securities not issued or guaranteed by sovereign,
regional and municipal governments represented 66.0% of our total debt
securities as at December 31, 2015, compared to 66.7% as at
December 31, 2014. Total government issued or guaranteed debt
securities as at December 31, 2015 were $23.8 billion, compared to
$22.1 billion as at December 31, 2014. With the exception of certain
countries where we have business operations, including Canada, the
United States, the United Kingdom and the Philippines, our exposure to
debt securities from any single country did not exceed 1% of total
invested assets on our Consolidated Statements of Financial Position as
at December 31, 2015.

The carrying value of debt securities of governments and financial
institutions by geographic location is presented in the following
table.

Debt Securities of Governments and Financial Institutions by Geography

December 31, 2015

December 31, 2014

($ millions)

Government issued orguaranteed

Financials

Government issued or
guaranteed

Financials

Canada

15,411

1,826

14,650

2,391

United States

1,702

6,046

1,590

5,992

United Kingdom

2,561

1,937

2,484

1,992

Philippines

2,745

42

2,575

17

Eurozone(1)

237

828

171

762

Other

1,111

1,577

611

1,390

Total

23,767

12,256

22,081

12,544

(1)

Our investments in Eurozone countries primarily included the
Netherlands, Spain, Germany and France. We did not have any direct exposure to Greece. Of our exposure to Eurozone countries, 99.1% was
rated investment grade and 77.4% had a credit rating of "A" or higher.

Our gross unrealized losses as at December 31, 2015 for FVTPL and AFS
debt securities were $1.1 billion and $0.22 billion, respectively,
compared with $0.22 billion and $0.04 billion, respectively, as at
December 31, 2014. The increase in gross unrealized losses was largely
due to the impact of rising interest rates, including credit spreads,
primarily in the U.S.

Our debt securities as at December 31, 2015 included $12.3 billion
invested in the financial sector, representing approximately 17.5% of
our total debt securities, or 8.9% of our total invested assets. This
compares to $12.5 billion, or 18.9% of the total debt security
portfolio, or 10.0% of our total invested assets as at December 31,
2014.

Our debt securities as at December 31, 2015 included $4.9 billion of
asset-backed securities reported at fair value, representing 7.1% of
our total debt securities, or 3.6% of our total invested assets. This
compares to $4.4 billion representing 6.7% of total debt securities or
3.6% of our total invested assets as at December 31, 2014.

Mortgages and Loans
Mortgages and loans disclosures in this section are presented at their
carrying value on our Consolidated Statements of Financial Position. As
at December 31, 2015, we had a total of $39.1 billion in mortgages and
loans, representing 28.3% of our total invested assets, compared to
$33.7 billion representing 26.9% as at December 31, 2014. Our mortgage
portfolio consisted almost entirely of first mortgages, and our
corporate loan portfolio consisted of private placement assets.

The carrying value of mortgages and loans by geographic location is
presented in the following table.(1)

Mortgages and Loans by Geography

December 31, 2015

December 31, 2014

($ millions)

Mortgages

Loans

Total

Mortgages

Loans

Total

Canada

8,067

13,271

21,338

7,847

12,308

20,155

United States

6,725

7,442

14,167

5,563

5,196

10,759

United Kingdom

—

886

886

1

776

777

Other

—

2,712

2,712

—

1,988

1,988

Total

14,792

24,311

39,103

13,411

20,268

33,679

(1)

The geographic location for mortgages is based on the location of the
property and for loans it is based on the country of the creditor's parent.

As at December 31, 2015, we held $14.8 billion of mortgages, compared to
$13.4 billion as at December 31, 2014. Our mortgage portfolio consists
entirely of commercial mortgages, including retail, office,
multi-family, industrial and land properties. As at December 31, 2015,
24.8% of our commercial mortgage portfolio consisted of multi-family
residential mortgages. Our uninsured commercial portfolio had a
weighted average loan-to-value ratio of approximately 55% as at
December 31, 2015, compared to approximately 54% as at December 31,
2014. While we generally require a maximum loan-to-value ratio of 75%
at issuance, we may invest in mortgages with a higher loan-to-value
ratio in Canada if the mortgage is insured. The estimated weighted
average debt service coverage for our uninsured commercial portfolio is
1.73 times. Of the loans in the Canadian commercial mortgage portfolio,
31.0% were insured by the Canada Mortgage and Housing Corporation.

As at December 31, 2015, we held $24.3 billion of corporate loans,
compared to $20.3 billion as at December 31, 2014. In the current low
interest rate environment, our strategy is to continue to focus our
efforts on the origination of new private placement assets. Private
placement assets provide diversification by type of loan, industry
segment and borrower credit quality. The loan portfolio consists of
senior secured and unsecured loans to large- and mid-market sized
corporate borrowers, securitized lease/loan obligations secured by a
variety of assets, and project finance loans in sectors such as power
and infrastructure.

The carrying value and allowance for mortgages and loans past due or
impaired is presented in the following table.

Mortgages and Loans Past Due or Impaired

December 31, 2015

Gross carrying value

Allowance for losses

($ millions)

Mortgages

Loans

Total

Mortgages

Loans

Total

Not past due

14,690

24,279

38,969

—

—

—

Past due:

Past due less than 90 days

7

32

39

—

—

—

Past due 90 days or more

—

—

—

—

—

—

Impaired

137

7

144

42

(1)

7

49

Total(1)

14,834

24,318

39,152

42

7

49

December 31, 2014

Gross carrying value

Allowance for losses

($ millions)

Mortgages

Loans

Total

Mortgages

Loans

Total

Not past due

13,316

20,248

33,564

—

—

—

Past due:

Past due less than 90 days

14

—

14

—

—

—

Past due 90 days or more

—

—

—

—

—

—

Impaired

118

36

154

37

(1)

16

53

Total(1)

13,448

20,284

33,732

37

16

53

(1)

Includes $21 million of sectoral provisions as at December 31, 2015 and
$18 million of sectoral provisions as at December 31, 2014.

Our impaired mortgages and loans, net of allowance for losses, were $95
million as at December 31, 2015, compared to $101 million as at
December 31, 2014. The majority of impaired mortgages are in the United
States.

Asset Default Provision
We make provisions for possible future credit events in the
determination of our insurance contract liabilities. The amount of the
provision for asset default included in insurance contract liabilities
is based on possible reductions in future investment yields that vary
by factors such as type of asset, asset credit quality (rating),
duration and country of origin. To the extent that an asset is written
off, or disposed of, any amounts that were set aside in our insurance
contract liabilities for possible future asset defaults in respect of
that asset are released.

Our asset default provision reflects the provision relating to future
credit events for fixed income assets currently held by the Company
that support our insurance contract liabilities. Our asset default
provision as at December 31, 2015 was $2,077 million compared to $1,916
million as at December 31, 2014. The increase of $161 million was
primarily due to the weakening of the Canadian dollar and increases in
the provision for assets purchased net of dispositions, partially
offset by the release of provisions on fixed income assets supporting
our insurance contract liabilities.

Derivative Financial Instruments
The values associated with our derivative instruments are presented in
the following table. Notional amounts serve as the basis for payments
calculated under derivatives contracts and are not exchanged.

Derivative Instruments

($ millions)

December 31, 2015

December 31, 2014

Net fair value

(1,512)

236

Total notional amount

57,845

48,211

Credit equivalent amount

607

738

Risk-weighted credit equivalent amount

7

7

The total notional amount of our derivatives increased to $57.8 billion
as at December 31, 2015 from $48.2 billion as at December 31, 2014. The
increase in the total notional amount was primarily due to an increase
of $5.9 billion in interest rate contracts for duration matching
activities and an increase of $0.9 billion in currency contracts
hedging foreign currency assets. The notional amount of derivatives
increased a further $2.0 billion due to the conversion of foreign
currency notional balances into Canadian dollars.

The net fair value of derivatives was a net liability of $1,512 million
as at December 31, 2015 compared to a net asset of $236 million as at
December 31, 2014. The decrease in net fair value was due primarily to
the impact of the weakening of the Canadian dollar against the U.S.
dollar on foreign exchange contracts.

Capital Management
Our total capital consists of subordinated debt and other capital,
participating policyholders' equity and total shareholders' equity
which includes common shareholders' equity and preferred shareholders'
equity. As at December 31, 2015, our total capital was $24.6 billion,
up from $21.7 billion as at December 31, 2014. The increase in total
capital was primarily the result of common shareholders' net income of
$2,185 million, other comprehensive income of $1,295 million, and the
issuance of $500 million of subordinated debentures, partially offset
by the $830 million of dividends on common shares (net of the Canadian
dividend reinvestment and share purchase plan), $212 million of common
share purchases under our normal course issuer bid, and redemption of
US$150 million of subordinated debentures.

The legal entity, SLF Inc. (the ultimate parent company), and its wholly
owned holding companies had $990 million in cash and other liquid
assets as at December 31, 2015 ($1,827 million as at December 31,
2014). The decrease in cash and liquid assets in 2015 was primarily
attributable to the acquisitions during 2015, including the purchase of
$1,250 million of Sun Life Assurance preferred shares in connection
with the funding of the pending acquisition of Assurant EB, as well as
other operating and financing activities. Liquid assets as noted above,
include cash and cash equivalents, short-term investments, and publicly
traded securities.

On June 30, 2015, 6.0 million Class A Non-Cumulative 5-Year Rate Reset
Preferred Shares Series 8R of SLF Inc. ("Series 8R Shares") were
converted into Class A Non-Cumulative Floating Rate Preferred Shares
Series 9QR of SLF Inc. ("Series 9QR Shares") through a shareholder
option, on a one-for-one basis. After the conversion, 5.2 million
Series 8R Shares and 6.0 million Series 9QR Shares were outstanding.
For additional information, refer to Note 16 in our Annual Consolidated
Financial Statements.

On September 25, 2015, SLF Inc. issued $500 million principal amount of
Series 2015-1 Subordinated Unsecured 2.60% Fixed/Floating Debentures
due 2025. The net proceeds will be used to partially fund the
acquisition of Assurant EB and may also be used for general corporate
purposes.

On November 23, 2015, SLF Inc. redeemed all of the outstanding $600
million principal amount of Series A Senior Unsecured 4.80%
Fixed/Floating Debentures ("the Series A Senior Debentures") due 2035
in accordance with the terms of the Series A Senior Debentures.

On December 15, 2015, the US$150 million principal amount of
Subordinated Unsecured 7.25% Debentures due 2015 issued by Sun Canada
Financial Company matured and was repaid.

On November 10, 2014, SLF Inc. launched a normal course issuer bid under
which it was authorized to purchase up to 9 million common shares
between November 10, 2014 and November 9, 2015, and subsequently the
normal course issuer bid was not renewed. During 2015, SLF Inc.
purchased and cancelled 5.3 million common shares at a total cost of
$212 million. During the fourth quarter of 2014, SLF Inc. repurchased
and cancelled approximately 1 million common shares at a total cost of
$39 million under this share repurchase program.

Dividends payable to participants in the Canadian Dividend Reinvestment
and Share Purchase Plan are used to purchase common shares either from
treasury or in the open market, at our discretion. Commencing with the
dividends payable on March 31, 2016 and until further notice, common
shares purchased under the Plan will be purchased on the open market.

Sun Life Assurance's MCCSR ratio was 240% as at December 31, 2015, which
includes the issuance of $1,250 million of preferred shares by Sun Life
Assurance to SLF Inc. in connection with the funding of the pending
acquisition of Assurant EB, compared to 217% as at December 31, 2014.
Excluding this impact, the increase in the MCCSR ratio over the period
primarily results from earnings net of dividends to SLF Inc., partially
offset by capital used to support new business and the impact of a
partial recapture of a reinsurance arrangement.

Risk Management
We have established a Risk Management Framework to assist in
identifying, measuring, managing, monitoring and reporting of risks.
The Risk Management Framework covers all risks and these have been
grouped into six major categories: credit, market, insurance, business
and strategic, operational and liquidity risks.

Through our enterprise risk management processes, we oversee the various
risk factors identified in the Risk Management Framework and provide
reports to senior management and to the Board Committees at least
quarterly. Our enterprise risk management processes and risk factors
are described in our annual MD&A and AIF.

When referring to segregated funds in this section, it is inclusive of
segregated fund guarantees, variable annuities and investment products
and includes Run-off reinsurance in our Corporate business segment.

Market Risk Sensitivities
Our earnings are affected by the determination of policyholder
obligations under our annuity and insurance contracts. These amounts
are determined using internal valuation models and are recorded in our
Annual Consolidated Financial Statements, primarily as Insurance
contract liabilities. The determination of these obligations requires
management to make assumptions about the future level of equity market
performance, interest rates, credit and swap spreads and other factors
over the life of our products. Differences between our actual
experience and our best estimate assumptions are reflected in our
Annual Consolidated Financial Statements. Refer to the section
Additional Cautionary Language and Key Assumptions Related to
Sensitivities for important additional information regarding these
estimates.

The market value of our investments in fixed income and equity
securities fluctuates based on movements in interest rates and equity
markets. The market value of fixed income assets designated as AFS that
are held primarily in our surplus segment increases (decreases) with
declining (rising) interest rates. The market value of equities
designated as AFS and held primarily in our surplus segment increases
(decreases) with rising (declining) equity markets. Changes in the
market value of AFS assets flow through OCI and are only recognized in
net income when realized upon sale, or when considered impaired. The
amount of realized gains (losses) recorded in net income in any period
is equal to the unrealized gains (losses) or OCI position at the start
of the period plus the change in market value during the current period
up to the point of sale for those securities that were sold during the
period. The sale or impairment of AFS assets held in surplus can
therefore have the effect of modifying our net income sensitivity.

We realized $39 million (pre-tax) in net gains on the sale of AFS assets
during the fourth quarter of 2015 and $228 million (pre-tax) in 2015
($49 million pre-tax in the fourth quarter of 2014 and $202 million
pre-tax in 2014). The net unrealized gains or OCI position on AFS fixed
income and equity assets were $53 million and $197 million,
respectively, after-tax as at December 31, 2015 ($340 million and $208
million, respectively, after-tax as at December 31, 2014).

The following table sets out the estimated immediate impact on, or
sensitivity of our net income, our OCI, and Sun Life Assurance's MCCSR
ratio to certain instantaneous changes in interest rates and equity
market prices as at December 31, 2015 and December 31, 2014.

Interest Rate and Equity Market Sensitivities

As at December 31, 2015(1)($ millions, unless otherwise noted)

Interest rate sensitivity(2)(6)

100 basis point
decrease

50 basis point
decrease

50 basis point
increase

100 basis point
increase

Potential impact on net income(3)(6)

$

(300)

$

(100)

$

50

$

50

Potential impact on OCI

$

500

$

250

$

(250)

$

(500)

Potential impact on MCCSR(4)

10% points decrease

4% points decrease

4% points increase

7% points increase

Equity markets sensitivity(5)

25% decrease

10% decrease

10% increase

25% increase

Potential impact on net income(3)

$

(350)

$

(100)

$

100

$

300

Potential impact on OCI

$

(150)

$

(50)

$

50

$

150

Potential impact on MCCSR(4)

4% points decrease

1% points decrease

2% points increase

4% points increase

As at December 31, 2014(1)
($ millions, unless otherwise noted)

Interest rate sensitivity(2)(6)

100 basis point
decrease

50 basis point
decrease

50 basis point
increase

100 basis point
increase

Potential impact on net income(3)(6)

$

(400)

$

(100)

$

50

$

100

Potential impact on OCI

$

500

$

250

$

(250)

$

(500)

Potential impact on MCCSR(4)

12% points
decrease

5% points
decrease

4% points
increase

8% points
increase

Equity markets sensitivity(5)

25% decrease

10% decrease

10% increase

25% increase

Potential impact on net income(3)

$

(250)

$

(50)

$

50

$

150

Potential impact on OCI

$

(150)

$

(50)

$

50

$

150

Potential impact on MCCSR(4)

5% points
decrease

1% points
decrease

1% points
increase

1% points
increase

(1)

Net income and OCI sensitivities have been rounded to the nearest $50
million. The sensitivities exclude the market impacts on the income
from our joint ventures and associates, which we account for on an
equity basis.

(2)

Interest rate sensitivities assume a parallel shift in assumed interest
rates across the entire yield curve as at December 31, 2015 and
December 31, 2014. Variations in realized yields based on factors such
as different terms to maturity and geographies may result in realized
sensitivities being significantly different from those illustrated
above. Sensitivities include the impact of re-balancing interest rate
hedges for dynamic hedging programs at 10 basis point intervals (for 50
basis point changes in interest rates) and at 20 basis point intervals
(for 100 basis point changes in interest rates).

(3)

The market risk sensitivities include the estimated mitigation impact of
our hedging programs in effect as at December 31, 2015 and December 31,
2014, and include new business added and product changes implemented
prior to such dates.

(4)

The MCCSR sensitivities illustrate the impact on Sun Life Assurance as
at December 31, 2015 and December 31, 2014. This excludes the impact on
assets and liabilities that are in SLF Inc. but not included in Sun
Life Assurance. MCCSR sensitivities as at December 31, 2014 reflect the
impact of IAS 19 Employee Benefits and its phase-in impact on available capital.

(5)

Represents the respective change across all equity markets as at
December 31, 2015 and December 31, 2014. Assumes that actual equity
exposures consistently and precisely track the broader equity markets.
Since in actual practice equity-related exposures generally differ from
broad market indices (due to the impact of active management, basis
risk and other factors), realized sensitivities may differ
significantly from those illustrated above. Sensitivities include the
impact of re-balancing equity hedges for dynamic hedging programs at 2%
intervals (for 10% changes in equity markets) and at 5% intervals (for
25% changes in equity markets).

(6)

The majority of interest rate sensitivity, after hedging, is attributed
to individual insurance products. We also have interest rate
sensitivity, after hedging, from our fixed annuity and segregated funds
products.

Our net income sensitivities to interest rates and equity markets have
changed since December 31, 2014. This is primarily as a result of
changes in measurement of sensitivities related to assumption changes
and management actions.

Credit Spread and Swap Spread Sensitivities
We have estimated the immediate impact or sensitivity of our shareholder
net income attributable to certain instantaneous changes in credit and
swap spreads. The credit spread sensitivities reflect the impact of
changes in credit spreads on our asset and liability valuations
(including non-sovereign fixed income assets, provincial governments,
corporate bonds and other fixed income assets). The swap spread
sensitivities reflect the impact of changes in swap spreads on
swap-based derivative positions and liability valuations.

Credit Spread Sensitivities ($ millions, after-tax)

Net income sensitivity(1)(2)

50 basis point decrease

50 basis point increase

December 31, 2015

$

(100)

$

75

December 31, 2014

$

(100)

$

125

(1)

Sensitivities have been rounded to the nearest $25 million.

(2)

In most instances, credit spreads are assumed to revert to long-term
insurance contract liability assumptions generally over a five-year
period.

Swap Spread Sensitivities ($ millions, after-tax)

Net income sensitivity(1)

20 basis point decrease

20 basis point increase

December 31, 2015

$

50

$

(50)

December 31, 2014

$

75

$

(75)

(1)

Sensitivities have been rounded to the nearest $25 million.

The credit and swap spread sensitivities assume a parallel shift in the
indicated spreads across the entire term structure. Variations in
realized spread changes based on different terms to maturity,
geographies, asset classes and derivative types, underlying interest
rate movements, and ratings may result in realized sensitivities being
significantly different from those provided above. The credit spread
sensitivity estimates exclude any credit spread impact that may arise
in connection with asset positions held in segregated funds. Spread
sensitivities are provided for the consolidated entity and may not be
proportional across all reporting segments. Refer to the section
Additional Cautionary Language and Key Assumptions Related to
Sensitivities for important additional information regarding these
estimates.

General Account Insurance and Annuity Products
Most of our expected sensitivity to changes in interest rates and about
two-thirds of our expected sensitivity to changes in equity markets are
derived from our general account insurance and annuity products. We
have implemented market risk management strategies to mitigate a
portion of the market risk related to our general account insurance and
annuity products.

Individual insurance products include universal life and other long-term
life and health insurance products. Major sources of market risk
exposure for individual insurance products include the reinvestment
risk related to future premiums on regular premium policies, asset
reinvestment risk on both regular premium and single premium policies
and the guaranteed cost of insurance. Interest rate risk for individual
insurance products is typically managed on a duration basis, within
tolerance ranges set out in the applicable investment policy or
guidelines. Targets and limits are established so that the level of
residual exposure is commensurate with our risk appetite. Exposures are
monitored frequently, and assets are re-balanced as necessary to
maintain compliance within policy limits using a combination of assets
and derivative instruments. A portion of the longer-term cash flows are
backed with equities and real estate.

For participating insurance products and other insurance products with
adjustability features, the investment strategy objective is to provide
a total rate of return given a constant risk profile over the long
term.

Fixed annuity products generally provide the policyholder with a
guaranteed investment return or crediting rate. Interest rate risk for
these products is typically managed on a duration basis, within
tolerance ranges set out in the applicable investment guidelines.
Targets and limits are established such that the level of residual
exposure is commensurate with our risk appetite. Exposures are
monitored frequently, and are re-balanced as necessary to maintain
compliance within prescribed tolerances using a combination of fixed
income assets and derivative instruments.

Certain insurance and annuity products contain features which allow the
policyholders to surrender their policy at book value. Market risk
management strategies are implemented to limit the potential financial
loss due to changes in interest rate levels and policyholder behaviour.
These typically involve the use of hedging strategies such as dynamic
option replication and the purchase of interest rate swaptions.

Certain products have guaranteed minimum annuitization rates. Market
risk management strategies are implemented to limit the potential
financial loss and typically involve the use of fixed income assets,
interest rate swaps and swaptions.

Segregated Fund Guarantees
Approximately one-third of our equity market sensitivity and a small
amount of interest rate risk sensitivity as at December 31, 2015 are
derived from segregated fund products. These products provide benefit
guarantees, which are linked to underlying fund performance and may be
triggered upon death, maturity, withdrawal or annuitization. The cost
of providing these guarantees is uncertain and depends upon a number of
factors including general capital market conditions, our hedging
strategies, policyholder behaviour and mortality experience, each of
which may result in negative impacts on net income and capital.

The following table provides information with respect to the guarantees
provided for our segregated fund products.

December 31, 2015

($ millions)

Fund value

Amount at Risk(1)

Value of guarantees(2)

Insurance contract liabilities(3)

SLF Canada

12,304

424

11,109

575

SLF U.S.

5,400

509

5,789

275

Run-off reinsurance(4)

2,950

569

2,129

570

Total

20,654

1,502

19,027

1,420

December 31, 2014

($ millions)

Fund value

Amount at Risk(1)

Value of
guarantees(2)

Insurance contract
liabilities(3)

SLF Canada

13,039

217

11,202

273

SLF U.S.

5,194

259

5,236

96

Run-off reinsurance(4)

2,800

501

1,999

526

Total

21,033

977

18,437

895

(1)

The Amount at Risk represents the excess of the value of the guarantees
over fund values on all policies where the value of the guarantees
exceeds the fund value. The Amount at Risk is not currently payable as
the guarantees are only payable upon death, maturity, withdrawal or
annuitization if fund values remain below guaranteed values.

(2)

For guaranteed lifetime withdrawal benefits, the value of guarantees is
calculated as the present value of the maximum future withdrawals
assuming market conditions remain unchanged from current levels. For
all other benefits, the value of guarantees is determined assuming 100%
of the claims are made at the valuation date.

(3)

The insurance contract liabilities represent management's provision for
future costs associated with these guarantees and include a provision
for adverse deviation in accordance with Canadian actuarial standards
of practice.

(4)

The Run-off reinsurance business includes risks assumed through
reinsurance of variable annuity products issued by various North
American insurance companies between 1997 and 2001. This line of
business is part of a closed block of reinsurance, which is included in
the Corporate segment.

The movement of the items in the table above from December 31, 2014 to
December 31, 2015 was primarily as a result of the following factors:

(i)

the total fund values decreased due to the natural run-off of the block
net of new sales and unfavourable equity market movements, partially
offset by the weakening of the Canadian dollar against the U.S. dollar;

(ii)

the amount at risk increased primarily due to unfavourable equity market
movements and the weakening of the Canadian dollar;

(iii)

the total value of guarantees increased due to the weakening of the
Canadian dollar, partially offset by the natural run-off of the block
net of new sales; and

(iv)

the total insurance contract liabilities increased due to lower interest
rates, unfavourable equity movements and the weakening of the Canadian
dollar.

Segregated Fund Hedging
Our hedging programs use derivative instruments to mitigate the interest
and equity related exposure of our segregated fund contracts. As at
December 31, 2015, over 90% of our segregated fund contracts, as
measured by associated fund values, were included in a hedging program.
While a large percentage of contracts are included in the hedging
program, not all of our market risk exposure related to these contracts
is hedged. For those segregated fund contracts included in the hedging
program, we generally hedge the value of expected future net claims
costs and associated margins.

The following table illustrates the impact of our hedging program
related to our sensitivity to a 50 basis point and 100 basis point
decrease in interest rates and a 10% and 25% decrease in equity markets
for segregated fund contracts as at December 31, 2015 and December 31,
2014.

Impact of Segregated Fund Hedging

December 31, 2015

($ millions)

Changes in interest rates(3)

Changes in equity markets(4)

Net income sensitivity(1)(2)

50 basis point
decrease

100 basis point
decrease

10% decrease

25% decrease

Before hedging

(200)

(450)

(200)

(600)

Hedging impact

200

500

150

500

Net of hedging

—

50

(50)

(100)

December 31, 2014

($ millions)

Changes in interest rates(3)

Changes in equity markets(4)

Net income sensitivity(1)(2)

50 basis point
decrease

100 basis point
decrease

10% decrease

25% decrease

Before hedging

(200)

(400)

(150)

(500)

Hedging impact

200

400

150

400

Net of hedging

—

—

—

(100)

(1)

Net income sensitivities have been rounded to the nearest $50 million.

(2)

Since the fair value of benefits being hedged will generally differ from
the financial statement value (due to different valuation methods and
the inclusion of valuation margins in respect of financial statement
values), this will result in residual volatility to interest rate and
equity market shocks in reported income and capital. The general
availability and cost of these hedging instruments may be adversely
impacted by a number of factors, including volatile and declining
equity and interest rate market conditions.

(3)

Represents a parallel shift in assumed interest rates across the entire
yield curve as at December 31, 2015 and December 31, 2014. Variations
in realized yields based on factors such as different terms to maturity
and geographies may result in realized sensitivities being
significantly different from those illustrated above. Sensitivities
include the impact of re-balancing interest rate hedges for dynamic
hedging programs at 10 basis point intervals (for 50 basis point
changes in interest rates) and at 20 basis point intervals (for
100 basis point changes in interest rates).

(4)

Represents the change across all equity markets as at December 31, 2015
and December 31, 2014. Assumes that actual equity exposures
consistently and precisely track the broader equity markets. Since in
actual practice, equity-related exposures generally differ from broad
market indices (due to the impact of active management, basis risk and
other factors), realized sensitivities may differ significantly from
those illustrated above. Sensitivities include the impact of
re-balancing equity hedges for dynamic hedging programs at 2% intervals
(for 10% changes in equity markets) and at 5% intervals (for 25%
changes in equity markets).

Real Estate Risk
Real estate risk is the potential for financial loss arising from
fluctuations in the value of, or future cash flows from, our
investments in real estate. We are exposed to real estate risk arising
from fluctuations in the value of, or future cash flows on, real estate
classified as investment properties. We may experience financial losses
resulting from the direct ownership of real estate investments or
indirectly through fixed income investments secured by real estate
property, leasehold interests, ground rents, and purchase and leaseback
transactions. Real estate price risk may arise from external market
conditions, inadequate property analysis, inadequate insurance
coverage, inappropriate real estate appraisals or from environmental
risk exposures. We hold direct real estate investments that support
general account liabilities and surplus, and fluctuations in value will
impact our profitability and financial position. A material and
sustained increase in interest rates may lead to deterioration in North
American real estate values. An instantaneous 10% decrease in the value
of our direct real estate investments as at December 31, 2015 would
decrease net income by approximately $175 million ($150 million
decrease as at December 31, 2014). Conversely, an instantaneous 10%
increase in the value of our direct real estate investments as at
December 31, 2015 would increase net income by approximately $175
million ($150 million increase as at December 31, 2014).

Additional Cautionary Language and Key Assumptions Related to
Sensitivities
Our market risk sensitivities are measures of our estimated change in
net income and OCI for changes in interest rates and equity market
price levels described above, based on interest rates, equity market
prices and business mix in place as at the respective calculation
dates. These sensitivities are calculated independently for each risk
factor, generally assuming that all other risk variables stay constant.
The sensitivities do not take into account indirect effects such as
potential impacts on goodwill impairment or valuation allowances on
deferred tax assets. The sensitivities are provided for the
consolidated entity and may not be proportional across all reporting
segments. Actual results can differ materially from these estimates for
a variety of reasons, including differences in the pattern or
distribution of the market shocks, the interaction between these risk
factors, model error, or changes in other assumptions such as business
mix, effective tax rates, policyholder behaviour, currency exchange
rates and other market variables relative to those underlying the
calculation of these sensitivities. The extent to which actual results
may differ from the indicative ranges will generally increase with
larger capital market movements. Our sensitivities as at December 31,
2014 have been included for comparative purposes only.

We have also provided measures of our net income sensitivity to
instantaneous changes in credit spreads, swap spreads, real estate
price levels and capital sensitivities to changes in interest rates and
equity price levels. The real estate sensitivities are non-IFRS
financial measures. For additional information, see Use of Non-IFRS
Financial Measures. The cautionary language which appears in this
section is also applicable to the credit spread, swap spread, real
estate and MCCSR ratio sensitivities. In particular, these
sensitivities are based on interest rates, credit and swap spreads,
equity market and real estate price levels as at the respective
calculation dates and assume that all other risk variables remain
constant. Changes in interest rates, credit and swap spreads, equity
market and real estate prices in excess of the ranges illustrated may
result in other-than-proportionate impacts.

As these market risk sensitivities reflect an instantaneous impact on
net income, OCI and Sun Life Assurance's MCCSR ratio, they do not
include impacts over time such as the effect on fee income in our asset
management businesses.

The sensitivities reflect the composition of our assets and liabilities
as at December 31, 2015 and December 31, 2014, respectively. Changes in
these positions due to new sales or maturities, asset purchases/sales
or other management actions could result in material changes to these
reported sensitivities. In particular, these sensitivities reflect the
expected impact of hedging activities based on the hedge programs in
place as at the December 31 calculation dates. The actual impact of
these hedging activities can differ materially from that assumed in the
determination of these indicative sensitivities due to ongoing hedge
re-balancing activities, changes in the scale or scope of hedging
activities, changes in the cost or general availability of hedging
instruments, basis risk (i.e., the risk that hedges do not exactly
replicate the underlying portfolio experience), model risk and other
operational risks in the ongoing management of the hedge programs or
the potential failure of hedge counterparties to perform in accordance
with expectations.

The sensitivities are based on methods and assumptions in effect as at
December 31, 2015 and December 31, 2014, as applicable. Changes in the
regulatory environment, accounting or actuarial valuation methods,
models, or assumptions after those dates could result in material
changes to these reported sensitivities. Changes in interest rates and
equity market prices in excess of the ranges illustrated may result in
other than proportionate impacts.

Our hedging programs may themselves expose us to other risks, including
basis risk (i.e., the risk that hedges do not exactly replicate the
underlying portfolio experience), derivative counterparty credit risk,
and increased levels of liquidity risk, model risk and other
operational risks. These factors may adversely impact the net
effectiveness, costs, and financial viability of maintaining these
hedging programs and therefore adversely impact our profitability and
financial position. While our hedging programs are intended to mitigate
these effects (e.g., hedge counterparty credit risk is managed by
maintaining broad diversification, dealing primarily with highly rated
counterparties, and transacting through International Swaps and
Derivatives Association agreements that generally include applicable
credit support annexes), residual risk, potential reported earnings and
capital volatility remain.

For the reasons outlined above, our sensitivities should only be viewed
as directional estimates of the underlying sensitivities of each factor
under these specialized assumptions, and should not be viewed as
predictors of our future net income, OCI, and capital sensitivities.
Given the nature of these calculations, we cannot provide assurance
that actual impact will be consistent with the estimates provided.

Information related to market risk sensitivities and guarantees related
to segregated fund products should be read in conjunction with the
information contained in the sections in the annual MD&A under the
headings Outlook and Critical Accounting Policies and Estimates.
Additional information on market risk can be found in Note 6 of our
2015 Annual Consolidated Financial Statements and the Risk Factors
section in our AIF.

Reconciliation of Non-IFRS Financial Measures
Additional information on the use of non-IFRS measures, including the
definition of operating net income (loss) and underlying net income
(loss), is available in this document under the heading Use of Non-IFRS
Financial Measures.

The following table sets out the amounts that were excluded from our
operating net income (loss), underlying net income (loss), operating
EPS and underlying EPS, and provides a reconciliation to our reported
net income (loss) and EPS based on IFRS.

Reconciliations of Select Net Income Measures

Quarterly results

($ millions, unless otherwise noted)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

Reported net income

536

482

726

441

502

Certain hedges in SLF Canada that do not qualify for hedge accounting

10

(10)

6

15

(6)

Fair value adjustments on MFS's share-based payment awards

(6)

28

(11)

(20)

1

Acquisition, integration and restructuring costs(1)

(66)

(14)

—

—

(4)

Operating net income (loss)

598

478

731

446

511

Market related impacts

(36)

(82)

97

(22)

(21)

Assumption changes and management actions

(12)

32

19

(48)

172

Underlying net income (loss)

646

528

615

516

360

Reported EPS (diluted) ($)

0.87

0.79

1.18

0.72

0.81

Certain hedges in SLF Canada that do not qualify for hedge accounting
($)

0.02

(0.02)

0.01

0.02

(0.01)

Fair value adjustments on MFS's share-based payment awards ($)

(0.01)

0.05

(0.02)

(0.03)

—

Acquisition, integration and restructuring costs ($)

(0.11)

(0.02)

—

—

(0.01)

Impact of convertible securities on diluted EPS ($)

(0.01)

—

—

—

—

Operating EPS (diluted) ($)

0.98

0.78

1.19

0.73

0.83

Market related impacts ($)

(0.05)

(0.13)

0.16

(0.03)

(0.04)

Assumption changes and management actions ($)

(0.02)

0.05

0.03

(0.08)

0.28

Underlying EPS (diluted) ($)

1.05

0.86

1.00

0.84

0.59

(1)

Beginning in the third quarter of 2015, we renamed the operating
adjustment Acquisition, integration and restructuring costs from
Restructuring and other related costs to accommodate acquisition and
integration adjustments arising from our 2015 activities.

Management also uses the following non-IFRS financial measures:

Return on equity. IFRS does not prescribe the calculation of ROE and therefore a
comparable measure under IFRS is not available. To determine operating
ROE and underlying ROE, operating net income (loss) and underlying net
income (loss) are divided by the total weighted average common
shareholders' equity for the period, respectively.

Adjusted revenue. This measure excludes from revenue the impact of: (i) exchange rate
fluctuations, from the translation of functional currencies to the
Canadian dollar, for comparisons ("Constant Currency Adjustment"); (ii)
Fair value and foreign currency changes on assets and liabilities ("FV
Adjustment"); and (iii) reinsurance for the insured business in SLF
Canada's GB operations ("Reinsurance in SLF Canada's GB Operations
Adjustment"). Adjusted revenue is an alternative measure of revenue
that provides greater comparability across reporting periods.

Quarterly results

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

Revenues

5,567

4,693

1,682

7,332

7,375

Constant Currency Adjustment

496

372

218

239

—

FV Adjustment

(788)

(168)

(3,500)

2,495

2,196

Reinsurance in SLF Canada's GB Operations Adjustment

(1,171)

(1,179)

(1,149)

(1,185)

(1,154)

Adjusted revenue

7,030

5,668

6,113

5,783

6,333

Adjusted premiums and deposits. This measure adjusts premiums and deposits for the impact of: (i) the
Constant Currency Adjustment and (ii) the Reinsurance in SLF Canada's
GB Operations Adjustment. Adjusted premiums and deposits is an
alternative measure of premiums and deposits that provides greater
comparability across reporting periods.

Quarterly results

($ millions)

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

Premiums and deposits

33,769

30,907

35,720

36,754

31,770

Constant Currency Adjustment

4,003

3,263

2,142

2,663

—

Reinsurance in SLF Canada's GB Operations Adjustment

(1,171)

(1,179)

(1,149)

(1,185)

(1,154)

Adjusted premiums and deposits

30,937

28,823

34,727

35,276

32,924

MFS pre-tax operating profit margin ratio. This ratio is a measure of the underlying profitability of MFS, which
excludes the impact of fair value adjustments on MFS's share-based
payment awards, investment income, and certain commission expenses that
are offsetting. These amounts are excluded in order to neutralize the
impact these items have on the pre-tax operating profit margin ratio
and have no impact on the underlying profitability of MFS.

Impact of foreign exchange. Several financial measures are presented on a constant currency
adjusted basis to exclude the impact of foreign exchange rate
fluctuations. These measures are calculated using the average or period
end foreign exchange rates, as appropriate, in effect at the date of
the comparative period.

Real estate market sensitivities. Real estate market sensitivities are non-IFRS financial measures, for
which there are no directly comparable measures under IFRS so it is not
possible to provide a reconciliation of these amounts to the most
directly comparable IFRS measures.

Other. Management also uses the following non-IFRS financial measures for
which there are no comparable financial measures in IFRS: (i) ASO
premium and deposit equivalents, mutual fund sales, managed fund sales,
life and health sales, and total premiums and deposits; (ii) AUM,
mutual fund assets, managed fund assets, other AUM and assets under
administration; (iii) the value of new business, which is used to
measure the estimated lifetime profitability of new sales and is based
on actuarial calculations; and (iv) assumption changes and management
actions, which is a component of our sources of earnings disclosure.
Sources of earnings is an alternative presentation of our Consolidated
Statements of Operations that identifies and quantifies various sources
of income. The Company is required to disclose its sources of earnings
by its principal regulator, the Office of the Superintendent of
Financial Institutions.

Forward-looking Statements
From time to time, the Company makes written or oral forward-looking
statements within the meaning of certain securities laws, including the
"safe harbour" provisions of the United States Private Securities
Litigation Reform Act of 1995 and applicable Canadian securities
legislation. Forward-looking statements contained in this document
include (i) statements relating to the anticipated source of funding
for the acquisition of Assurant EB and the timing of receipt of
regulatory approvals and closing for that transaction, (ii) statements
relating to our growth strategies,(iii) statements relating to
productivity and expense initiatives, growth initiatives and other
business objectives, (iv) statements that are predictive in nature or
that depend upon or refer to future events or conditions, and (v)
statements that include words such as "aim", "anticipate",
"assumption", "believe", "could", "estimate", "expect", "goal",
"initiatives", "intend", "may", "objective", "outlook", "plan",
"project", "seek", "should", "strategy", "strive", "target", "will" and
similar expressions are forward-looking statements. Forward-looking
statements include the information concerning our possible or assumed
future results of operations. These statements represent our current
expectations, estimates and projections regarding future events and are
not historical facts. Forward-looking statements are not a guarantee of
future performance and involve risks and uncertainties that are
difficult to predict. Future results and shareholder value may differ
materially from those expressed in these forward-looking statements due
to, among other factors, the matters set out in this document under the
headings Capital Management and Risk Management, and in SLF Inc.'s most
recent AIF under the heading Risk Factors, and the factors detailed in
SLF Inc.'s other filings with Canadian and U.S. securities regulators,
which are available for review at www.sedar.com and www.sec.gov.

Factors that could cause actual results to differ materially from
expectations include, but are not limited to: credit risks - related to issuers of securities held in our investment portfolio,
debtors, structured securities, reinsurers, counterparties, other
financial institutions and other entities; market risks - related to the performance of equity markets; changes or volatility in
interest rates or credit spreads or swap spreads; real estate
investments; and fluctuations in foreign currency exchange rates; insurance risks - related to mortality, morbidity, longevity and policyholder behaviour;
product design and pricing; the impact of higher-than-expected future
expenses; and the availability, cost and effectiveness of reinsurance; business and strategic risks - related to global economic and political conditions; changes in
distribution channels or customer behaviour including risks relating to
market conduct by intermediaries and agents; changes in the
competitive, legal or regulatory environment, including capital
requirements and tax laws; tax matters, including estimates and
judgments used in calculating taxes; the design and implementation of
business strategies; the performance of our investments and investment
portfolios managed for clients such as segregated and mutual funds; our
international operations, including our joint ventures; market
conditions that affect our capital position or ability to raise
capital; downgrades in financial strength or credit ratings; and the
impact of mergers, acquisitions and divestitures; operational risks - related to breaches or failure of information system security and
privacy, including cyber-attacks; our ability to attract and retain
employees; the execution and integration of mergers, acquisitions and
divestitures; legal, regulatory compliance and market conduct,
including the impact of regulatory inquiries and investigations; our
information technology infrastructure; a failure of information systems
and Internet-enabled technology; dependence on third-party
relationships, including outsourcing arrangements; business continuity;
model errors; information management; the environment, environmental
laws and regulations and third-party policies; and liquidity risks - the possibility that we will not be able to fund all cash outflow
commitments as they fall due.

The following risk factors are related to our pending acquisition of
Assurant EB and could have a material adverse effect on our financial
results: (i) ability to complete the transaction as planned, including
the separation and integration of the transferred business; (ii)
failure of the parties to obtain necessary consents and approvals
required under the definitive agreement or to otherwise satisfy the
conditions to the completion of the transaction in a timely manner, or
at all; (iii) our ability to realize the financial and strategic
benefits of the transaction; (iv) failure to effectively or efficiently
restructure and reorganize our U.S. employee benefits business after
the transaction has closed; and (v) the impact of the dedication of our
resources to the completion of the transaction and integration of the
business and the effect the transaction may have on our continuing
operations in the U.S. These risks all could have an impact on our
business relationships (including with future and prospective
employees, customers, distributors and partners) and could have a
material adverse effect on our current and future operations, financial
conditions and prospects.

The Company does not undertake any obligation to update or revise its
forward-looking statements to reflect events or circumstances after the
date of this document or to reflect the occurrence of unanticipated
events, except as required by law.

Earnings Conference Call
The Company's fourth quarter 2015 financial results will be reviewed at
a conference call on Thursday, February 11, 2016, at 10:00 a.m. ET. To
listen to the call via live audio webcast and to view the presentation
slides, as well as related information, please visit www.sunlife.com and click on the link to Q4 results from the "Investors" section on the
home page 10 minutes prior to the start of the call. Individuals
participating in the call in a listen-only mode are encouraged to
connect via our webcast. Following the call, the webcast and
presentation will be archived and made available on the Company's
website, www.sunlife.com, until the Q4 2016 period end. The conference call can also be accessed
by phone by dialing 647-788-4901 (International) or 1-877-201-0168
(Toll-free North America).

Consolidated Statements of Operations

For the three months ended (1)

For the twelve months ended(2)

(in millions of Canadian dollars except for per share amounts)

December 31, 2015

December 31,
2014

December 31, 2015

December 31,
2014

Revenue

Premiums

Gross

$

5,163

$

4,023

$

16,824

$

15,499

Less: Ceded

1,612

1,322

6,429

5,503

Net premiums

3,551

2,701

10,395

9,996

Net investment income (loss):

Interest and other investment income

1,327

1,258

5,288

4,941

Fair value and foreign currency changes on assets and liabilities

(788)

2,196

(1,961)

6,172

Net gains (losses) on available-for-sale assets

39

49

228

202

Net investment income (loss)

578

3,503

3,555

11,315

Fee income

1,438

1,171

5,324

4,453

Total revenue

5,567

7,375

19,274

25,764

Benefits and expenses

Gross claims and benefits paid

3,679

3,397

14,086

12,816

Increase (decrease) in insurance contract liabilities

669

2,660

1,261

8,920

Decrease (increase) in reinsurance assets

(125)

193

(505)

13

Increase (decrease) in investment contract liabilities

10

11

(29)

70

Reinsurance expenses (recoveries)

(1,508)

(1,378)

(6,146)

(5,411)

Commissions

566

500

2,100

1,889

Net transfer to (from) segregated funds

(3)

(19)

(43)

(30)

Operating expenses

1,383

1,191

5,037

4,537

Premium taxes

75

68

292

251

Interest expense

80

94

322

336

Total benefits and expenses

4,826

6,717

16,375

23,391

Income (loss) before income taxes

741

658

2,899

2,373

Less: Income tax expense (benefit)

180

124

599

491

Total net income (loss)

561

534

2,300

1,882

Less: Net income (loss) attributable to participating policyholders

1

6

15

9

Shareholders' net income (loss)

560

528

2,285

1,873

Less: Preferred shareholders' dividends

24

26

100

111

Common shareholders' net income (loss)

536

502

2,185

1,762

Earnings (loss) per share

Basic

$

0.88

$

0.82

$

3.57

$

2.88

Diluted

$

0.87

$

0.81

$

3.55

$

2.86

(1)

Quarterly numbers are unaudited.

(2)

Derived from the audited Annual Consolidated Financial Statements.

Consolidated Statements of Financial Position

As at

(in millions of Canadian dollars)(1)

December 31, 2015

December 31, 2014

Assets

Cash, cash equivalents and short-term securities

$

8,983

$

6,818

Debt securities

69,896

66,214

Equity securities

5,313

5,223

Mortgages and loans

39,103

33,679

Derivative assets

1,866

1,839

Other invested assets

3,111

2,375

Policy loans

3,151

2,895

Investment properties

6,540

6,108

Invested assets

137,963

125,151

Other assets

3,931

3,429

Reinsurance assets

5,386

4,042

Deferred tax assets

1,372

1,230

Property and equipment

636

555

Intangible assets

1,479

895

Goodwill

4,646

4,117

Total general fund assets

155,413

139,419

Investments for account of segregated fund holders

91,440

83,938

Total assets

$

246,853

$

223,357

Liabilities and equity

Liabilities

Insurance contract liabilities

$

110,227

$

101,228

Investment contract liabilities

2,913

2,819

Derivative liabilities

3,378

1,603

Deferred tax liabilities

405

155

Other liabilities

12,332

9,725

Senior debentures

2,248

2,849

Subordinated debt

2,492

2,168

Total general fund liabilities

133,995

120,547

Insurance contracts for account of segregated fund holders

83,670

76,736

Investment contracts for account of segregated fund holders

7,770

7,202

Total liabilities

$

225,435

$

204,485

Equity

Issued share capital and contributed surplus

$

10,900

$

10,805

Retained earnings and accumulated other comprehensive income

10,518

8,067

Total equity

$

21,418

$

18,872

Total liabilities and equity

$

246,853

$

223,357

(1)

Derived from the audited Annual Consolidated Financial Statements.

About Sun Life Financial
Sun Life Financial is a leading international financial services
organization providing a diverse range of protection and wealth
products and services to individuals and corporate customers. Sun Life
Financial has operations in a number of markets worldwide, including
Canada, the United States, the United Kingdom, Ireland, Hong Kong, the
Philippines, Japan, Indonesia, India, China, Australia, Singapore,
Vietnam, Malaysia and Bermuda. As of December 31, 2015, the Sun Life
Financial group of companies had total assets under management of $891
billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and
Philippine (PSE) stock exchanges under the ticker symbol SLF.